Nominal GDP: Value of output produced in current prices
can increase from year to year if either output or price increase 
formula: pxq
 
Real GDP: value of output produced in base year or constant prices
-adjusted for inflation
-can increase from year to year only if output increases
-formula: base year price  x current year quantity

Price index: is a measure of inflation by tracking changes in a market basket of goods compared with the base year
-formula: price of market basket of goods in current year/price of market basket of goods in base years x 100

GDP deflator: price index used to adjust from nominal GDP to real GDP
-in the base year, GDP deflator =100
-for years after the base year, GDP deflator >100
-for year before the base year, GDP deflator <100
-formula: nominal GDP/real GDP x100