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What is the difference between real and nominal Gross Domestic Product?
National Income consists of a price and a quantity element. When the price level doubled along with similar amount of goods and services produced in that case nominal national income doubles but real national income keeps as constant.
• Nominal Gross Domestic Product is current output valued at current prices for example, 2000 output valued at 2000 prices
• Real Gross Domestic Product measure the volume of result adjusted for inflation. Real Gross Domestic Product is current output valued at stable or base year prices for example, 2000 output valued at 1987 prices (that is 1987s the RPI base year).
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