what is real gross domestic product gdp 
real gross domestic product gdp is an inflation adjusted measure that reflects the value of all goods and services produced by an economy in a given year real gdp is expressed in base year prices it is often referred to as constant price gdp inflation corrected gdp or constant dollar gdp put simply real gdp measures the total economic output of a country and is adjusted for changes in price investopedia paige mclaughlinunderstanding real gross domestic product gdp real gdp is a macroeconomic statistic that measures the value of the goods and services produced by an economy in a specific period adjusted for price changes essentially it measures a country s total economic output taking price changes into account whether they are due to inflation or deflation 1governments use both nominal and real gdp as metrics for analyzing economic growth and purchasing power over time this is done using the gdp price deflator also called the implicit price deflator which measures the changes in prices for all of the goods and services produced in an economy to determine real gdp economists take nominal gdp and adjust it for price changes 2the bureau of economic analysis bea provides a quarterly report on gdp with headline data statistics representing real gdp levels and real gdp growth nominal gdp is also included in the bea s quarterly report under the name current dollar unlike nominal gdp real gdp accounts for changes in price levels and provides a more accurate figure of economic growth 3the u s real gdp growth rate during the first quarter of 2024 annualized 3calculating real gdp is a complex process typically best provided by the bea in general you calculate real gdp by dividing nominal gdp by the gdp deflator r real gdp nominal gdp r where gdp gross domestic product r gdp deflator begin aligned text real gdp frac text nominal gdp text r textbf where text gdp text gross domestic product text r text gdp deflator end aligned real gdp rnominal gdp where gdp gross domestic productr gdp deflator the bea provides the deflator on a quarterly basis the gdp deflator is a measurement of inflation since a base year dividing the nominal gdp by the deflator removes the effects of inflation 4for example if an economy s prices have increased by 1 since the base year the deflating number is 1 01 if nominal gdp was 1 million then real gdp is calculated as 1 000 000 1 01 or 990 099 