Real GDP

Real GDP

Real GDP is a macroeconomic measure of the size of an economy adjusted for price changes and inflation.

Real GDP measures the output of final goods and services produced, and incomes earned at constant prices. Real GDP = [(Nominal GDP)/(GDP deflator)] x 100

Real GDP for a given year is the given year's nominal GDP stated in the based-year price level. Real GDP growth on an annual basis is the nominal and abnormal GDP growth rate adjusted for inflation and expressed as a percentage.

Because Real GDP is adjusted for changes in prices and inflation throughout the year, it can be thought of in terms of 'purchasing power.'

Real GDP per Capita reflects GDP purchasing power of each individual in the economy.

Real GDP per capita is found by dividing real GDP by the size of the population.

ee also

* Real versus nominal value


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