Economic Growth

Economic growth can be measured in ‘nominal’ or ‘real’ terms. Nominal economic growth refers to the increase in the dollar value of production over time. This includes changes in both the volume of production and the prices of goods and services produced. Economists normally talk about real economic growth – that is, increases in the volume produced only, which takes away the effect of prices changing. This is because it better reflects how much a country is producing at a given time, compared with other points in time. How is GDP Measured?