ECO 1104 Lecture Notes - Lecture 6: Gdp Deflator, Nominal Interest Rate, Real Interest Rate

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Serge Nadeau

Document Summary

2002: the annual rate of inflation from november 2012 to november. 2011 = + 0. 83: the rate of inflation from november 2012 to october 2012 = - If that annual rate (+0. 83%) were to continue for 10 years this would translate into ((1. 0083)^10 -1) x 11) = 1. 086-1) x 100 = Esp. energy: designed to reflect longer-term trends. If deflator for a given year > 100 prices in hat year are higher than they were in 2002: so nominal gdp for that year in current dollars > real gdp in constant, If the deflator for a given year < 100 price level in that year is lower than it was in 2002: so nominal gdp in current dollars for that year < real gdp in constant. 2002 dollars: illustration: if prices in 2002 are higher than they were in 1980 current dollars < real gdp in 1980 in 2002 constant dollars as 1980 $ are worth more than 2002 $