What do you mean by Real GDP?

Business & Management
#1

Real GDP, also known as constant-price GDP or inflation-corrected GDP, is an inflation-adjusted metric that represents the value of all goods and services generated by an economy in a given year (expressed in base-year prices). It calculates a country’s overall economic production after adjusting for price variations.

#2

GDP is gross domestic product it excludes the net of imports and exports which is GNP. GDP is the sum of consumer, investment and government spending. This is in nominal terms, Real GDP subtracts inflation from those amounts.

To calculate real gdp-

Real gdp=nominal gdp/ deflator

Deflator shows change in price level with respect to a base year.
Example-

Change in price level wrto base year is 5% . Then deflator= 1.05
If nominal gdp= 1000.
Then real gdp= 1000/1.05
real gdp= 952.38