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Nominal and Real GDP and their use

Prepare a two- to three-page analysis by answering the questions below. Be sure to cite your references using APA format.

What is nominal GDP? What is real GDP? What is included in each? Why are these measures important? What do they tell us? What was GDP for the last two years? Use the data at the following Web site to answer this question:

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The response address the queries posted in 937 words with references.

//Before discussing various elements of nominal Gross Domestic Product (GDP) and real GDP; first, we will discuss the 'meaning' of GDP. The meaning of this term will also help you to understand the importance of GDP in an economy. I am providing an overview on the nominal GDP and Real GDP, so that you can understand these terms.

Nominal and Real GDP:

GDP is measured to evaluate the change in the economy over a period of time. Nominal GDP can be defined as the total value of the production of goods and services in a country. This term is used to measure the value of all goods and services production in a country at current prices. The value of the domestic production at today's prices is expressed under nominal GDP (Wessels, 2000). The increase in the output or the prices in an economy causes the increase in the real GDP because of the lack of inflation adjustments.

On the other hand, real GDP can be defined as the measurement of the total production of goods and services at the prices of some base year. In the real GDP, the adjustments for inflation and the changes in prices is also included. In the measurement of the real GDP, the constant prices of the final goods and services are included rather than current prices.

//Above, we discussed the term nominal and real GDP. Now as per the requirement, we will discuss the various 'Elements of the GDP'. We will also discuss the various elements of real GDP. ...