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Economists need to take the fact that the prices were higher in 2008 than in 1978 into account to compare the two years accurately. Because prices for products and services tend to rise over time, the inflation rate is positive in most years. For this reason, nominal GDP rates are typically higher than real GDP rates.
The chain-weight real growth rate is then computed as the geometric mean of these two fixed-weight real growth rates (row 13). The next step is to choose a base year and calculate real GDP figures for each year by using the chain-weight real growth rates.In Figure 1, year 3 is chosen as the base year, so nominal GDP in year 3 is declared chain-weight real GDP.he BEA does not directly calculate chain-weight GDP using an equation like (1) , but the actual method employed by the BEA to calculate real GDP growth is also probably impractical at the intermediate level.