Question

What is the difference between nominal GDP and Real GDP? Give the formula for the
computation of Real GDP from nominal GDP.
and national income.​

Answer 1

Answer:

Nominal GDP, or nominal gross domestic product, is a measure of the value of all final goods and services produced within a country’s borders at current market prices. Also known as a “current dollar GDP” or “chained dollar GDP,” nominal GDP takes price changes, money supply, inflation, and changing interest rates into account when calculating a country’s gross domestic product.

Real gross domestic product is a macroeconomic measure of the value of economic output adjusted for price changes. This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output.