Course Hero Logo

Real Gross Domestic Product (GDP) Definition THE RIGHT GDP.pdf

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 1 - 9 out of 13 pages.

PART OFGuide to Inflation
ECONOMYECONOMICSWhat Is Real Gross Domestic Product (Real GDP)?Real Gross Domestic Product (Real GDP)By|Reviewed by|Updated Mar 30, 2021AKHILESH GANTIERIC ESTEVEZ
AdvertisementKEY TAKEAWAYS
Nominal vs. Real GDPReal gross domestic product (Real GDP) is an inflation-adjusted measure that reflects thevalue of all goods and services produced by an economy in a given year (expressed in base-year prices) and is often referred to as "constant-price," "inflation-corrected", or "constantdollar" GDP.Real GDP makes comparing GDP from year to year and from different years more meaningfulbecause it shows comparisons for both the quantity and value of goods and services.Real GDP is calculated by dividing nominal GDP over a GDP deflator.AdvertisementCLICK TO PLAYCLICK TO PLAY2:37
Understanding Real GDPReal GDP is a macroeconomic statistic that measures the value of the goods and services produced byan economy in a specific period, adjusted forinflation. Essentially, it measures a country's totaleconomic output, adjusted for price changes. Governments use both nominal and real GDP as metricsfor analyzing economic growth andpurchasing powerover time. This is done using the GDP pricedeflator (also called the implicit price deflator), which measures the changes in prices for all of thegoods and services produced in an economy. The GDP price deflator is considered to be a moreappropriate inflation measure for measuring economic growth than theconsumer price index(CPI)because it isn't based on a fixed basket of goods.
TheBureau of Economic Analysis(BEA) provides a quarterly report on GDP[1]with headline datastatistics representing real GDP levels and real GDP growth. Nominal GDP is also included in the BEA’squarterly report under the name current dollar. Unlikenominal GDP, real GDPaccounts for changes inprice levels and provides a more accurate figure of economic growth.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 13 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
Dr. John Komlos
Tags
Economics, Inflation, gross domestic product, BEA

Newly uploaded documents

Show More

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture