Gross Domestic Product (GDP) refers to the total value of final goods and services produced in an economy, normally over the period of one year. It is measured in either current prices or constant prices. GDP at current prices or Nominal GDP, as it is called, means that the total value of final goods and services is measured at the prevailing price level in that period. Correspondingly, GDP at constant prices or Real GDP, means that the total value of final goods and services is measured at a price level from which the element of inflation would have been removed. This action enables the determination that an increase(decrease) in an economy's production from year-to-year would have been due to a direct increase(decrease) in production, and not influenced by price increases(decreases). On this basis, economic growth is measured as the percent change in Real GDP, since this constant price measurement, in effect, indicates the 'real' or actual production in an economy.
