How can real GDP be defined compared to nominal GDP?

Real GDP can be defined as the measure of a country's economic performance that has been adjusted for inflation. This means that real GDP accounts for changes in price levels over time, allowing for a more accurate comparison of economic output from one period to another. By adjusting for inflation, real GDP reflects the true growth in an economy's production of goods and services, rather than simply showing increases that may be attributed to rising prices.

In contrast, nominal GDP measures a country's economic output without adjusting for inflation. This can lead to distortions in understanding economic growth, as increases in nominal GDP may reflect both increased production and increased price levels, rather than a true increase in the volume of goods and services produced.

Real GDP is particularly useful for analyzing trends over time or comparing the economic performance of different countries, as it provides a clearer picture of how much an economy is actually growing rather than how much the money supply may have changed.