Economics Business Cycles Questions
Nominal GDP refers to the total value of goods and services produced within an economy during a specific period, typically a year, using current market prices. It is an economic indicator that measures the overall economic activity and output of a country. Nominal GDP includes both the changes in the quantity of goods and services produced, as well as changes in their prices. It is often used to compare the economic performance of different countries or to track the growth or contraction of an economy over time. However, nominal GDP does not account for inflation, which means that changes in nominal GDP can be influenced by changes in prices rather than actual changes in production. To account for inflation, economists often use real GDP, which adjusts nominal GDP for changes in prices to provide a more accurate measure of economic growth.