Answer to Question #309593 in Macroeconomics for nikki

Question

Explain the difference between Real and Nominal GDP.                              

Answer 1

Explain the difference between Real and Nominal GDP.        

Nominal GDP reflects current GDP at current prices. Real GDP, on the other hand, reflects current GDP at past (base) year prices. Because the amount of inflation is subtracted from the total GDP when calculating nominal GDP, it is higher than the value of real GDP.