What is the difference between real GDP and potential GDP?

Gross domestic product (GDP) has many different measurements, including real GDP and potential GDP, but these numbers are often so similar that it can be difficult to know the differences. Real GDP and potential GDP treat inflation differently because potential GDP is based on constant inflation, while real GDP can change. Potential GDP is an estimate that is often reset every quarter of real GDP, while a real GDP describes the real financial state of the country or region. It is based on a constant level of inflation, so potential GDP cannot increase higher, but the actual GDP can rise. As with the inflation rate, these GDP measurements consider unemployment either to be a constant or as a variable.

Inflation, whether positive or negative, is a factor that constantly affects the country or region. Although it is true, real GDP and potential GDP treat inflation differently, which often leads to differences in the range of mild to main. With potential GDP inflation is considered constant, so measure withNever change. In the calculation of real GDP, the actual inflation rate - which is susceptible to change - is used. The inflation rate of potential GDP is usually reset every quarter of inflation that occurred in the actual GDP.

Real HDP is more accurate about real GDP measurement and potential GDP because it describes how a country or region actually does financially. Potential GDP is used as an estimate that describes how well the country or region can do during a quarter, but the actual measurement may be quite different. This means that Real HDP is often used to make the country or region in the last quarter, while potential HDP is used as a measuring tool for the next quarter.

is based on the estimated inflation rate, so potential GDP cannot increase by no higher than its estimated value. Real GDP can drastically change during the quarter on the basis of amounta and inflation production.While potential GDP is often considered a tool for displaying the highest value of the country or region, real GDP can sometimes be higher than potential GDP.

unemployment is a factor that can affect production, inflation rate and the general value of the country or region. As with the level of inflation, potential GDP considers unemployment as a constant, while the real GDP measures the actual unemployment rate. Usually, the unemployment rate does not change the level of inflation, so it tends to have less influence on GDP.