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What Is Real GDP? Why Do We Calculate Real GDP

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What is real GDP? Why do we calculate real GDP? What are the shortcomings of real GDP?


Definitions:

Net Income

A measure of a company's profitability, calculated as revenue minus expenses, taxes, and costs.

Fixed Assets

Tangible assets expected to be used in business operations for a period longer than one year, such as equipment, real estate, and vehicles.

Full Capacity Sales

Full Capacity Sales represent the maximum sales level a company could achieve utilizing its available capacity without incurring additional capital expenses.

Net Income

Net income, also known as net profit, is the total earnings of a company after subtracting all expenses, taxes, and costs from total revenue; it indicates the financial health and profitability of a business.

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