GDP

Gross Domestic Product (GDP): Gross Domestic Product or GDP define the total amount of production of goods and services within the given period of time.

There are two types of GDP. This are-

(i) Nominal GDP

(ii) Real GDP

(i) Nominal GDP: We can measure the GDP for a particular year using the actual market prices of that year. This gives us the nominal GDP by multiplying the quantities of good by a fixed set of prices. 

 (ii) Real GDP: Real GDP is the index of the volume or quantity of goods and services produce. We measure real GDP by multiplying the quantities of good by a fixed set of prices.

Nominal GDP is calculated by using the changing market price; on the other hand, real GDP is calculated by using the constant price.