What Is the Real Gross Domestic Product?
A real gross domestic product is an inflation-adjusted measure of the total production of goods and services within the borders of a country. In other words, it measures the amount of common goods that can be bought, rather than the amount of money spent on goods. Gross domestic product is typically calculated using either the price of the goods or the incomes of the producers of the goods. The real gross domestic product can be used to compare total economic activity between two different time periods. Gross domestic product calculations are inherently limited in their accuracy because of transactions that tend to escape official records.
