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How to Calculate Real GDP?

The real gross domestic product of a country measures the value of its economic activity. But how can you calculate it?
You will need: a base year, base year prices and economic activity values.

Step 1:
____________________

Step 2:
Understand that real GDP is the sum of all produced goods and services at constant prices gleaned from a specified base year. __________

In contrast, nominal GDP is the sum of the value of all produced goods and services at current prices. Nominal GDP is a better indicator of sheer output than the value of output over time.

Step 3:
Choose a base year. __________

Step 4:
Evaluate economic activity by determining the values of consumer spending, investment, government spending, and net exports in base year prices.

Step 5:
__________ Then compare your country’s ranking with that of others.

Did you know? The real GDP of the United States was approximately $12.9 trillion in 2009.

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