nominal and real gdp

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4 Terms

1
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nominal gdp

total value of all goods produced in an economy

measured using current prices (at the time of production)

does not include inflation

2
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real gdp

vale of all goods and services produced in an economy

adjusted for inflation/deflation, using prices of base year

reflects actual volume of production without effect of changing prices

3
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real gdp formula

(Base year price x Year 2 total quantity of product A) + (Base year price x Year 2 total quantity of product B)

4
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nominal gdp formula

(Total Quantity of Product A x Price per unit) + (Total Quantity of Product B x Price per unit)