Real and Nominal GDP

Nominal GDP- Value of output produced in current prices 
- current prices
- PxQ- output

Can increase from year to year if output increases or input increases


Real GDP- Value of output produced in constant based year prices 
-Adjusted for inflation
-constant (base year) prices 
-PxQ
-measure economic growth 
-can increase from year to year only if output increase in the base year- nominal and real GDP are equal

In years after base year, nominal exceed GDP  
Base year is usually earliest year listed