Final answer:
Nominal GDP uses current prices, while Real GDP uses prices adjusted for inflation.
Step-by-step explanation:
Nominal GDP uses current prices, while Real GDP uses prices adjusted for inflation.
Nominal GDP is the value of goods and services produced in an economy at current market prices. It does not take into account the effects of inflation, so it may overestimate the actual level of production.
On the other hand, Real GDP is adjusted for inflation, which means it reflects the true level of output by considering price changes. This adjustment allows for accurate comparisons of economic growth over time.