The Organisation for Economic Co-operation and Development has defined gross domestic product as “an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).”

1. Gross Domestic Product
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Definition
The Organisation for Economic Co-operation and
Development has defined gross domestic product as “an
aggregate measure of production equal to the sum of the
gross values added of all resident institutional units
engaged in production (plus any taxes, and minus any
subsidies, on products not included in the value of their
outputs).”

3. 3 ways to estimate gross domestic
product:
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Expenditure basis
Income basis
Output basis

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Nominal vs. Real GDP
• Nominal GDP is the actual gross domestic product
that has not been adjusted for inflation. When
inflation is not taken into account for the gross
domestic product figure, it can be quite misleading.
• Real gross domestic product is a measure of the
value of economic output that has been adjusted for
price changes. They have been adjusted for
inflation.

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