What is the difference between nominal GDP and real GDP?

Nominal GDP refers to the total value of all goods and services produced in a country at current market prices, without adjusting for inflation. Real GDP, on the other hand, is adjusted for inflation, reflecting the true value of goods and services produced by removing the effect of price increases over time. Real GDP is a more accurate measure of a country’s economic performance because it allows for comparisons across different time periods by isolating the impact of inflation. Nominal GDP can be misleading when comparing economic performance over time, as it may reflect price changes rather than actual growth.