Final answer:
To differentiate the growth in nominal GDP from 1980 to 1990 into real GDP growth and inflation, one must use the GDP deflator as provided in Table 6.5, which adjusts for changes in the price level over time.
Step-by-step explanation:
When analyzing economic growth, it is important to distinguish between nominal GDP and real GDP. Nominal GDP is the gross domestic product measured using the market prices during the time it is reported. In contrast, real GDP provides a more accurate picture as it is adjusted for inflation, taking into account the change in price levels over time.
To analyze the growth of the U.S. economy from 1980 to 1990 using data from Table 6.5, one must separate the portion of growth attributable to an actual increase in goods and services produced from the portion that reflects the rise in prices. The growth in nominal GDP includes both real growth and inflation, so by applying the GDP deflator (with a base year set to 2005 = 100), we can calculate how much of the nominal GDP growth was due to real GDP growth, and how much was due to inflation.