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REAL GDP

8 May, 2015 - 11:10

Real GDP is GDP adjusted for inflation (or change in value of money). The unadjusted GDP is known as nominal or current GDP. The adjustment consists in dividing current GDP by a price index (also known as a deflator).

GNP adjusted for inflation is said to be real in the same way as what a paycheck can buy in various goods and services, is the real purchasing power of that salary.