What is the GDP deflator and how is it used to convert nominal GDP into real GDP?

• A. The GDP deflator is (Nominal GDP / Real GDP) × 100, used to adjust for price level changes to obtain real GDP.
• B. The GDP deflator measures only inflation in the goods market and is calculated as Real GDP / Nominal GDP.
• C. The GDP deflator is the same as the Consumer Price Index and is used to convert real GDP to nominal GDP.
• D. The GDP deflator equals Nominal GDP minus Real GDP, used to measure economic growth.

Answer: (A)