Gross Domestic Product
Gross Domestic Product (GDP) statically measures companies and people who produce in the US in this economy. There are three main reasons the GDP affects our economy. The GDP determines how quickly or slowly the economy is changing, it compares the sizes and relative growth rate of economy throughout the world. The components of GDP (Gross Domestic Product) will tell you what the U.S. is good at producing. Over 70% of what the U.S. produces is from personal consumption. The remaining 30%of GDP is business investment (16%) and the government (19%), of which one-third is defense. The largest components of personal consumption includes more than 40% of GDP are services such as real estate (10%) and healthcare (12%). There are three components of non-durable goods food (10%)clothing (2.7%), and fuel (2.4%). Durable goods are the smallest of GDP and they make up8% such as auto (3.6%) and furniture (3%). (About. com, a)
Real GDP
Real GDP is an inflation-adjusted measure to reflect the value of all goods and services produced in a given year. Every year the real GDP reports are compared with Bureau of Economic Analysis (BEA). The BEA uses three distinctive in calculating the Real GDP. People and Companies with income and imports from outside the US are not counted. Effects of inflation also are taken out. The final product is the only is counted. Real GDP is used as a more accurate figure in determining changes in the price level. According to Investopedia it is often referred to as "constant-price", "inflation-corrected" GDP or "c ...