Nominal GDP

Real GDP

1. GDP at current prices is known as nominal domestic income.
2. It is the sum of total market value of final goods and services produced in a year and estimated at current prices.
3. National income at current prices can increase even when there is no increase in flow of goods and services in the economy by only prices happen to increase.
4. It does not give true performance of the economy in terms of economic growth.

1. GDP at constant prices is known as the real domestic income.
2. It is the sum of total market value of final goods and services produced in a year and estimated at the prices of the base year.
3. National income at constant prices will increase only when there is an increase in flow of goods and services.

4.  By calculating he percentage change of real GDP          in a year, we can measure the true                              performances of the economy in terms of rate of          economic growth.