Gross domestic product

Key Questions

• What are the differences between real GDP and nominal GDP?

  Real gross domestic product (GDP) is adjusted for inflation whereas nominal GDP is not.

  When comparing nominal GDP's between two time periods, their difference may not be an effective metric because of price discrepancies. Goods in one era may cost a lot more or less depending on the inflation rate between the two periods. Thus, real GDP is more useful in comparing GDP's between two time periods because it ignores the effect of increasing or decreasing prices.

  Kuba Dolecki · 2 · Jan 28 2015

• How is GDP measured?
• What are the differences between real GDP and nominal GDP?
• What can cause GDP increase in the short run?
• What is GDP per capita?