GDP Nominal, GDP PPP, GDP Per Capita
1. GDP Nominal The formula for calculating Nominal GDP is: Nominal GDP= ∑(Price of Goods and Services×Quantity of Goods and Services) Or, more generally: Nominal GDP=C+I+G+(X−M) Where: C = Consumption (spending by households) I = Investment (spending by businesses on capital) G = Government spending X = Exports M = Imports (subtracted to account for spending on foreign goods) This formula sums up all spending in an economy at current market prices, without adjusting for inflation. 2. GDP, Purchasing Power Parity (PPP) The simplest formula for GDP at Purchasing Power Parity (PPP) is: GDP (PPP) = Nominal GDP/ Price Level Index (PLI) Where: Nominal GDP is the GDP at current market prices. Price Level Index (PLI) is a factor that adjusts for differences in price levels between countries, relative to a base country or the world average. Alternatively, if comparing across countri...
