Real Vs. Nominal GDP

1
Real Vs. Nominal GDP

• A distinction between Nominal GDP and Real GDP
  allows us to measure the actual changes in
  production, separate and apart from any price
  changes that may have occurred in the economy
  during the year.

2
Real Vs. Nominal GDP

• Nominal GDP
• The total market value of all the final goods
  and services produced within an economy in a
  given year. The value of GDP in current dollar.
• Real GDP
• A measure of GDP that adjusts for changes in
  prices. The value of GDP in constant dollar.

3
GDP Deflator

• An index that measures how the prices of goods
  included in GDP change over time.