Nominal Gross Domestic Product (GDP)

Posted by Mr. P | Key Words | Monday 19 January 2009 5:25 PM

Nominal GDP is gross domestic product that is not adjusted for fluctuations in the price level, such as inflation or deflation.  It is the sum of quantities of final goods multiplied by their current price.  Nominal GDP is also known as Dollar GDP or GDP at current dollars.

Because nominal GDP does not take inflation into account it is not an accurate representation of the growth of an economy as it could be skewed by simply a rise in inflation, which gives a completely different representation of how well the economy is functioning.  A more informative number to look at is Real GDP

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