Macro Revision: Real Gross Domestic Product

Real national output or real GDP is one of the key macroeconomic indicators for any economy including the UK.

UK GDP measures the value of goods and services produced within the UK. Some of this output is produced by foreign-owned businesses such as a car plant or overseas-owned retailer.

Changes in the level and rate of growth of real GDP are a key part of the cyclical nature of the economy. A slowdown or fall in real GDP for example, can lead to a fall in employment and a rise in cyclical unemployment.

Remember to label real GDP or real national income on the x-axis of an AD-AS diagram!