Real Gross Domestic Product (Real GDP): How to Calculate It, vs. Nominal

What Is Real Gross Domestic Product (GDP)? Realgross domestic product (GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year. Real GDP is expressed in base-year prices. It is often referred to as constant-price GDP, inflation-corrected GDP, or constant-dollar GDP. Put simply, real GDP measures the total economic output of a country and is adjusted for changes in price.Key TakeawaysRealgross domestic product is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year.It is expressed in base-year prices and is often referred to as constant-price, inflation-corrected, or constant-dollar GDP.Real GDP makes comparing GDP more meaningful because it shows comparisons for both the quantity and value of goods and services.Real GDP is calculated by dividing nominal GDP by a GDP deflator.Unlike real GDP, nominal GDP uses current market prices and doesn't factor in...