- Nominal GDP measures economic production in an economy, but includes current prices for goods and services in its calculation.
- GDP is usually measured as the monetary value of goods and services produced.
- Since nominal GDP does not eliminate the rate of price growth when comparing one period to another, it can overstate the rate of growth.
- An increase in nominal GDP from year to year may reflect rising prices rather than an increase in the quantity of goods and services produced.
- Real GDP starts from nominal GDP but takes into account price changes between periods.