   
|
|
|
|
Real GDP
|
Real GDP is gross domestic product in constant dollars. In other words, real GDP is a nation's total output of goods and services, adjusted for price changes. Real GDP can be compared to nominal GDP, which is GDP in current dollars, i.e., the nation's output in actual dollars in a given year. Here's an example of real GDP: suppose in year 1 a country produced a total of five widgets priced at $10 each, or $50 total. In year 2, it produced the same five widgets, but the price rose to $12, or $60 total. Assume year 1 is the base year used to calculate real GDP. In year 1, nominal GDP was $50 and real GDP was also $50. In year 2, nominal GDP was $60; but real GDP was only $50, because in constant (year one) dollars, only $50 in widgets were produced. By eliminating the effect of price changes, real GDP allows economists to make useful comparisons of a nation's output and services. Note that real GDP is also known as constant-price GDP and inflation-corrected GDP.
Rate this real GDP definition...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: EBITDA, liquidity ratio, 401a, deferred tax, command economy, 144a, per diem, margin rate, deferred revenue, required rate of return, cancelled check, open position, stock split, ex-dividend, implied volatility, in escrow, irrevocable trust, limit order, quality assurance, risk management, 1035 exchange, Key Rate Duration, class C shares, current ratio, Zero Cost Collar, 1031 exchange, wholly-owned subsidiary, VIX, reverse mortgage, retained earnings, phantom income, option premium, minority interest, labor relations, ex-dividend date, covered put, real GDP, LIBOR, inflation, dividends payable, diluted share, debt service coverage, balance sheet, APR, equities, average price per share, FICO score, FTSE, stock market close
|
|
|
|
