Community and Government

Learn About Real Gross Domestic Product: Definition, Explanation, and Formula for Calculating Real GDP

Written by MasterClass

Last updated: Oct 12, 2022 • 3 min read

Calculating a country’s income helps determine its level of economic activity. The most common way to calculate national income is the gross domestic product—or GDP.

There are two ways to calculate GDP: the most basic calculation is “nominal GDP” (often referred to simply as “GDP”), and, when that is adjusted for inflation, it is called “real GDP.”