Real GDP is an attempt to capture aggregate output in which goods and services are valued at prices from a base year. Nominal GDP measures using only current goods and real GDP measures using the base year and current goods. The way this affects everyone's everyday life is major. This is how we tell prices of goods at different times and the cause of them to be this way. Using these numbers and calculations, we are able to solve for values such as price indexes and deflating GDP. This is necessary for individuals and firms to understand. For anyone running a business, this is will be important and always necessary to understand.
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