definition: Real Economic Growth Rate is the
rate at which a nation's Gross Domestic product (GDP) changes/grows from
one year to another. GDP is the market value of all the goods and
services produced in a country in a particular time period.
Description: Real Economic Growth Rate takes into account the effects of inflation. Since inflation plays a key role in the GDP of an economy, it is very important to ascertain the effects of inflation on GDP. As a result, the Real Economic Growth Rate takes into account the buying power and is inflation-adjusted. This is the reason it is considered to be a better measure of growth rate than the nominal growth rate.
Description: Real Economic Growth Rate takes into account the effects of inflation. Since inflation plays a key role in the GDP of an economy, it is very important to ascertain the effects of inflation on GDP. As a result, the Real Economic Growth Rate takes into account the buying power and is inflation-adjusted. This is the reason it is considered to be a better measure of growth rate than the nominal growth rate.
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