Because it shows the true value of a currency as well.
what is GDP in economy
Growth in real GDP is the only true indicator of weather or not an economy is growing.
as long as a different sector of the economy contributes to GDP by more than was lost from unemployment, real GDP will rise, if only marginally.
An economy that experiences decreasing real GDP and increasing prices suffering from stagflation.
Potential GDP is basically the sum of growth in productivity, growth in labor force, and growth in number of hours worked. In a mature economy like the US, change in number of hours worked is insignificant and often ignored. -Potential GDP is the level of real GDP that the economy would produce if it were at full employment. When real GDP falls short of potential GDP the economy is not at full employment. When the economy is at full employment real GDP equals potential GDP. Real GDP can exceed potential GDP only temporarily as it approaches and then recedes from a business cycle peak.
The equilibrium and the real GDP usually occurs where C plus LG equals GDP in a private closed economy because of the balance in trade.
The main difference is that Real GDP accounts for inflation and is calculated using Nominal GDP. It is useful when trying to compare GDPs froms different times.
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Nominal GDP does not tell much, but real GDP tells a lot. If the real GDP has fallen from one year to another, it means that the economy is in depression. If it grows, it shows that the economy is booming. If there is no change, the economy is stagnant (i.e. it did not grow).
Economic growth. Since that is basically the definition of a growing economy, steady increase in GDP
Real GDP is a measure of the economic output of a country. The absolute measure only tells you what that output was for a particular period. The more important measure for employment is the difference between real GDP and a theoretical real GDP which economists use to calculate the maximum output of an economy. When the gap between real GDP and maximum output GDP is large, the unemployment rate will be large and vice versa.
To find the GDP deflator, divide the nominal GDP by the real GDP and multiply by 100. The GDP deflator measures the change in prices of all goods and services produced in an economy.