Real GDP uses current-year quantities and base-year prices.
Real gross domestic product (GDP), which is corrected for inflation, is a measurement of an economy's output of all goods and services over the course of a year. Since real GDP is calculated using prices from the base year, it is also frequently referred to as constant price, inflation-corrected, or constant dollar GDP.
Real GDP includes corrections for inflationary hikes. This suggests that in an inflationary environment, real GDP will be lower than nominal GDP and vice versa. Real GDP, as opposed to nominal GDP, provides a more trustworthy foundation for evaluating a country's long-term economic success. A GDP price deflator is used to calculate real GDP, which is GDP per unit of measurement.
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