Real GDP and nominal GDP | GDP: Measuring national income | Macroeconomics | Khan Academy 

just spent my last 5 weeks sleeping in and out in class and now my midterms test is in a week. this will save me from failing my macroeconomics class i know it

Shooting for that A+ on the 1st year Macro Econ midterm tomorrow, and I'm a C student. Made possible by the one and only Khan.

Really....this has become my last and ultimate resort to clear my concepts..thank u from core of my heart.

You lost me after apples

This is extremely helpful! Finally, I find a wonderful explanation that i can understand well. Thank you so much!

thanks you are really good at explaining the difference! i have a test tommorow fml

Thank you so much Kahn! You explained it so much better than my macro book. They want us to use some stupid price index shit which is confusing, thanks again mate!

I love this guy when I hear his voice I know am passing at least with an -A❤ much respect

Clear and concise. Thank you for explaining so well!

Nnnooow I'm starting to understand it better. Gonna watch the whole series so I can ace this test. Thank you as always.

the axis should be switched: quantity as x and price as y

Brilliant, thank you so much, made that a lot clearer :) 3 hours and a bit till my exam and been up all night :)

I had an idea but some doubts. Your explanation solidified my understanding. Thanks a bunch for taking the time to make this video. I wish those who did not like "like" on the video would explain what they see wrong with this video.

@cheddyrod this is a really simple example. we could also say its gdp depends on foreign relations, price of oil, UN regulations etc... this is a simplified example to help you understand the basics.

cheers, mate. makes total sense. Imo the real growth is the only thing that matters. Unfortunately ppl keep forgetting that.

Thanks for your explanation

This video was wonderful for me thank you so much

THANK YOU SIR ! 😌

I am so much in debt to you for teaching me so much! :)

Exactly, what a awesome explanation. You are legend. Thank you very much.

@kaushiksays dude, this is what you would have to do in an economics course. It's meant to demonstrate a concept of one part of what would happen in the real world.

Nice explanation

Thank you so much!! This is by far the best explanation of real GDP and nominal GDP!

i love khan academy

Wow thanks for explaining that, I have always wonder what's the difference between Nominal and Real GDP means

Khan Bhai Thank you so much now I am cleared with Real and Nominal GDP.

Thanks sir ! For explaining in such a simple manner!

That measures inflation, and it is simple. It just asks you to see inflation as percentage. It is important. Real GDP and Nominal GDP and Index measures are 2 different things.

Khan love you and your videos I appreciate all the help you have given me!

thank you. there is no other like you

Thanks for Sharing. It helps alot

@NZSideways8 no, that's not because of black background. It's because the video compression tries to encode only the changes. In these screencasts of an image painting program, virtually nothing changes from frame to frame, making this extremely efficient. The codec mostly only has to update the area under the tablet pointer. The same would be true for images with solid white background or even photos in the background.

Very nice way of explaining the concepts.

Genuinely about to cry… This explains much more better.

Thank you. I finally get it.

Finally understand it. Thanks

Thanks, this was useful.

Thank you very much...

Thank you so much.very helpful

Amazing explanation

This was crazy helpful. Thank you!

thanks mr khan

Sal Khan is my hero

Would you guys consider starting a video series for teaching for UPSC exam preparations in India?

i like it

I dont know if many people notice, but the fact that most of these videos are black makes them really small, the 720p version of this is only 14MB - crazy. My point is that it makes them easy to stream on low bandwidth plans.

awesome very good representation by graph

thank you so much I can understand more than my teacher explain me lol

Im not sure why, but that calculator made me laugh :D

Brain goes oooooooooh, thankyou!

Awesome! Thank you.

i finally understand for real!

I understood it. That's Kahan academy

Playlist is titled "Microeconomics and Macroeconomics"

Price should be at Y axis and Quantity at X axis.

if what you care about is the change in totoal quantity(the whole point o f nominal GDP), why don't you measure and compare the quantity in gross production of both years in the first place??

Wow, that was helpful, thanks!

Helpful

If your here looking for the definition nominal gdp is just the market value of goods and services made in the economy and is unadjusted for inflation, and real gdp is nominal gdp juss adjusted for inflation. SIMPLE ANSWER YOUR WELCOM

Thank you!

What software are you using?

PLEASE MAKE MORE MACRO ECON VIDEOS I NEED TO GET A GOOD GRADE IN THIS CLASS bengali 4 lyfeeee

hey khan, can you do a video or 2 on 3d graphing basics please? thanks

Excellent 👌👍❤

So why many countries GDP is much higher than GDP nominal?! As you said GDP nominal should be higher...

@MATH7660 you could use any photoshop or photoshop elements and then your tablet.

Please advise: What does it mean when we have a decrease in Nominal GDP and a increase in real GDP both compared the year before? Thank you.

He is King Khan.

Is year 1 always the year in which the country was founded? How do you compare real GDPs from countries that were founded in different years? As more inflation would occur in 200 years than 50 years.

Okay let's assume that the price of apples increases for inflation but the output (quantity) remains exactly the same in the following year.

This is amazing!

So which gdp is our reference to see how much it increase for a certain year

You legend brother

nice video

I actually understand it... incredible! :D

Thanks for your great explanation. You make it easier

Aren't you assuming that the quality of apples are the same? Does that make a difference?

I finally get it! Thank you Jesus!

The question is what is GDP. Is GDP the quantity of goods produced or the value of those goods! For example, in an infertile year with the same investment and labor, fewer apples will be produced, but then the value of each apple will be higher than last year. Thus, in both years we have produced two different quantities of apples, but each of these quantities has the same value. If GDP measures the amount of apples, it will have decreased in the second year, but if it measures the value of apples produced, it will be the same, even though fewer apples have been produced in the second year. So if we assume in the video example that there is no inflation, that is, that banknotes express the value of goods without changing the scale of that expression, in terms of value, the second year of GDP has grown by 20%. In this case, it will turn out that the second year was less fertile, but more trees were harvested than the previous year. In other words, the production of 1 kg of apples required more labor, but at the same time more apples were produced than in the previous year. And what happens if the increase in the PRICE of apples is due to inflation and not to a change in VALUE (price and value are not the same thing!)? See the following comment:

This was extremely helpful!

What if the price increase of apples were actually due to better quality or larger apples? What if we dealing with iphone 10 vs iphone 11? What about services, if we had a price increase due to improvement of services?

But you did not show us how the calculation of nominal GDP should be done as?

should be 2181 lb of apples, cause technically 0.8 of an apple isn't an entire apple sold. great video tho, keep up the good work :D

@SalsaTiger83 Oh yes, thats what I was meaning (how its all black) but yep thats explained better.

i wonder why we dont take gdp y2/inflation rate?

Awsummm explanatn sir Thnk uhh soo much Was really helpful

Let's say: if you want to assess the growth of productivity of a certain country during a period of time - use PPP GDP figures, BUT if you want to compare current productivity of say two countries against each other - use nominal GDP figures. Any opinions?

This is fantastic. Thank you.

Is there a rule for whether we use p2 or q2? I’ve seen some use p2 and others use q2 but I don’t see why

Thank you! :)~:~

Mmmmm TI-85 Rom... Would it be accurate to measure this against the population? In my mind it would be similar to an artificial interest gain in a bank account where that interest is actually lower than inflation in currency. Say you made $50 one year on an account with $20,000, but inflation for that year was 1.7%. Effectively, you've still lost money. The point would be that even if production goes up, it could and probably does go down per capita.

What are the answers

My problem is my teacher gave us a chart with no product or prices just a chart with a hundred numbers on it.

Would this level of economics be considered (senior) high school/ first semester of Uni type of work?

@khan academy. How can I get that calculator you're using? And what is the name of it?

why q2 would multiply p1????

real help sir ~~

bless ur kind soul. u are better than my prof lmao

y is this in yours microeconomics videos? this is macro

I LOVE U