What fundamental economic concept distinguishes nominal GDP from real GDP
The fundamental economic concept that distinguishes nominal GDP from real GDP is inflation. Nominal GDP measures the total value of all goods and services produced in an economy over a specific time period, without adjusting for changes in price levels. On the other hand, real GDP takes into account inflation or deflation by adjusting the nominal GDP figure for changes in price levels, providing a more accurate representation of an economy's actual output.
In summary, nominal GDP measures the monetary value of goods and services produced in an economy without adjusting for inflation, while real GDP adjusts for inflation to provide a more accurate reflection of an economy's true output.