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Gross domestic product is the total market value of goods and services produced within the country during a year
Nominal gross domestic product, or nominal GDP, is the
total market value of goods and services produced, measured in current prices.
Suppose in the year 2010, the economy of a country
produced $150 billion worth of goods and services based on year 2010
prices. Since we're using 2010 as basis year, the nominal GDP and Real GDP are the same.
In the year 2011, the economy produced $180 billion worth of
goods and services based on year 2011 prices. Those same goods and
services are instead valued at $165 billion if year 2010 prices are used. Then:
Year 2010 Nominal GDP = $150 Billion, Real GDP = $150 Billion Year 2010 Nominal GDP = $180 Billion, Real GDP = $165 Billion
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Aug 19th, 2015
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