In macroeconomics, what is the difference between nominal GDP and real GDP?

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william1941 | College Teacher | (Level 3) Valedictorian

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The gross domestic product or GDP is the value of all the goods and services produced in a country. GDP can be expressed in two ways. One is by using the current costs of all the goods and services produced in the country. This is called the nominal GDP. This is equivalent to the prices that you would pay if you bought the goods or services today.

GDP can also be expressed as the cost of the goods and services produced in a country but at the prices they had in a particular year which is taken to be the base year. If there no inflation the nominal and real GDP will remain the same, else the two vary.

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