How is real GDP measured?

Question

Quizplus · Accepted Answer

Real GDP is measured in base-year prices, also referred to as constant prices. This means that the value of goods and services produced is adjusted for inflation, providing a more accurate measure of economic growth over time. In contrast, nominal GDP is measured in current-year prices, which can be distorted by changes in prices over time. Quality of goods produced is not a direct factor in measuring real GDP, although it can indirectly impact production and economic growth.

How Is Real GDP Measured