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