What is the real gross domestic product?
The real gross domestic product is the measure of the total production of goods and services for inflation within the country's borders. In other words, it measures the place of ordinary goods that can be purchased rather than the amount of money spent on the goods. Gross domestic product usually counts on using the price of goods or income of goods manufacturers. The gross domestic product Real can be used to compare overall economic activity between two different periods of time. In essence, gross domestic product calculations are limited by their accuracy due to transactions that tend to escape official records.
Inflation is one of the factors that can affect the rough calculations of the domestic product. Inflation is a tendency to decrease the value of money over time due to the expansion of the total money supply, among other things. Usually, the price of basic household goods such as bread is measured. Although the same amount of money can be less of the goods over time, inflation tends to encourage citizens to spend money rather than onTheir accumulation, which supports economic growth and increases gross domestic product.
It is usually advisable to measure wages, goods and other assets in terms of price. Under inflation conditions, however, prices over time are rising. It may therefore be difficult to compare prices from different time periods. For this reason, the calculation of real gross domestic product is often often used instead of nominal values real . The actual values are always reported in terms of the basic year, such as "US dollars in 2010"; The connection of the basic year suggests that the value of money concerns the economic conditions of this year. Real data on domestic domestic product always specify the year to which the currency refers to.
The gross domestic product is one economic activity that is measured in terms of price. It can be calculated by adding the prices of all the items produced, all items purchased or inthe lure of the revenue in the country. It is important to distinguish where production has occurred because the real gross domestic product only includes production in the political borders of the country. The real gross domestic product is usually used to assess the overall power of the economy independent of comparison between different years.
A real gross domestic product never fully describes economic transactions in the country. Different transactions are unnoticed because they are not regulated in the legal market. Many services such as cleaning and babysitting are not reported for tax purposes and therefore escape official statistics. It is also very difficult to measure illegal transactions. Another undetected activity is the exchange or direct trade in goods.