GDP
Gross Domestic Product (GDP) is the market value of all final goods and services produced within a country's borders in a specific period, usually one year. It can be measured in nominal terms (current prices) or real terms (constant prices). GDP is the most widely used measure of economic performance and size.
Real World
In 2023, UK real GDP grew by just 0.1%, while nominal GDP rose by around 7% — the difference was almost entirely inflation, showing why economists insist on using real GDP for meaningful comparisons.
Exam Focus
State whether you mean real or nominal GDP — using the wrong one without clarification loses accuracy marks on data-response questions.
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