Tip:
Highlight text to annotate it
X
How to Calculate Real GDP. The real gross domestic product of a country measures the
value of its economic activity. But how can you calculate it? You will need Base year
Base year prices and economic activity values. Step 1. Know that a country's GDP is the sum
of the prices of all goods and services produced in its economy during a set period of time.
Step 2. Understand that real GDP is the sum of all produced goods and services at constant
prices gleaned from a specified base year. Real GDP permits a comparison of economic
growth from year to year in terms of production of goods and services. In contrast, nominal
GDP is the sum of the value of all produced goods and services at current prices. Nominal
GDP is a better indicator of sheer output than the value of output over time. Step 3.
Choose a base year. The prices for this year will be used for the calculations in the other
years as well. Step 4. Evaluate economic activity by determining the values of consumer spending,
investment, government spending, and net exports in base year prices. Step 5. Calculate the
sum of these separate contributions to GDP. Then compare your country's ranking with that
of others. Did you know The real GDP of the United States was approximately $12.9 trillion
in 2009.