Discuss recent changes in real and nominal GDP and in the components of GDP

Question:

Discuss recent changes in real and nominal GDP and in the components of GDP

Gross Domestic Product:

The goods and services with the monetary value produced within the country's geographical region are known as the gross domestic product. The Real GDP and Nominal GDP are two types of gross domestic product.

Answer and Explanation:

The real GDP focuses on the change in the prices of goods and services. The nominal GDP refers to the monetary value of goods and services for current prices and includes the effect on the increase in prices.

There are four components of GDP consumption, government purchase, investment, and net export. According to the recent changes, the growth rate of the nominal GDP is higher than the real GDP.


Learn more about this topic:

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Gross Domestic Product: Definition and Components

from Economics 102: Macroeconomics

Chapter 4 / Lesson 3
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