Unit 3.1 · Measuring Economic Activity and Illustrating Its Variations
Real GDP and Real GNI
AO2AO4
Syllabus Requirement
Real GDP and GNI are adjusted for inflation using a price deflator to reflect constant prices.
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
Real GDP and real GNI are important measures of economic activity that account for inflation, allowing for more accurate comparisons over time. By using constant prices, these metrics reflect the true changes in income and output, rather than just nominal increases that may be influenced by rising prices.