What Does Nominal GDP Mean?
A gross domestic product (GDP) figure that has not been adjusted for inflation. Also known as current dollar GDP or chained dollar GDP. Investopedia explains Nominal GDP Any GDP figure that does not account for inflation can be misleading because GDP will appear higher than it actually is. The same concept that applies to return on investment (ROI) applies here. If a person has a 10% ROI and inflation for the year has been 3%, that person’s real rate of return will be 7%. Similarly, if the nominal GDP figure has shot up 8% but inflation has been 4%, the real GDP has increased only 4%.
