(i) Real GDP: When GDP is measured at constant prices or the base year's prices is known as Red GDP. GDP at constant prices will Ony increase when there is an increase in the flow of goods and services in the economy.
(ii) Nominal GDP: When CDP is measured at the prevailing or the current year prices is known, as Nominal GDP. GDP at current prices may increase even if there is no increase in the flow of. goods and services in the economy.
Detailed Answer :
Real gross domestic product (GDP) is an inflationadjusted measure that reflects the value of all goods and services produced by an economy in a given year, expressed in base-year price and is often referred to as "constant-price", "inflodioncorrected" GDP or "Constant dollar GDP".
Nominal GDP is the value of al the final goods and services that an economy produced during a given year. It is calculated by using the price that are current in the year, in which the output is produced in economics, a nominal value is expressed in monetary term.
