Real versus nominal value (economics)
Gross domestic product (GDP) is a measure of aggregate output. Nominal GDP in a particular period reflects prices which were current at the time, whereas real GDP compensates for inflation. Price indices and the U.S. National Income and Product Accounts are constructed from bundles of commodities and their respective prices. In the case of GDP, a suitable price index is the GDP price index. In the U.S. National Income and Product Accounts, nominal GDP is called "GDP in current dollars" (that is, in prices current for each designated year), and real GDP is called "GDP in [base-year] dollars" (that is, in dollars that can purchase the same quantity of commodities as in the base year).
Real gross domestic product
An index called the GDP deflator can be obtained by dividing, for each year, the nominal GDP by the real GDP, so that the GDP deflator for the base year will be 100. It gives an indication of the overall level of price change (inflation or deflation) in the economy.