In all things economics, nominal is in the units that your currency is in (e.g. USD). Real values are corrected for inflation. If from year X to year X+1, nominal GDP increased by 5% and the inflation rate was 3%, then the real GDP growth was 2%.
Nominal GDP uses today’s dollars. It doesn’t show how the value of a dollar has changed over time. (One dollar today buys a lot less than one dollar fifty years ago.)
So real GDP is important because it includes inflation. This lets us compare how the economy is doing over time.
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In all things economics, nominal is in the units that your currency is in (e.g. USD). Real values are corrected for inflation. If from year X to year X+1, nominal GDP increased by 5% and the inflation rate was 3%, then the real GDP growth was 2%.
Nominal GDP uses today’s dollars. It doesn’t show how the value of a dollar has changed over time. (One dollar today buys a lot less than one dollar fifty years ago.)
So real GDP is important because it includes inflation. This lets us compare how the economy is doing over time.
How much money is made on paper versus what you can actually buy with it