* Inflation: Inflation is the general increase in prices and fall in the purchasing value of money. When prices rise, the nominal GDP increases, but the real GDP does not. This is because the real GDP is adjusted for inflation, so it only measures the changes in the quantity of goods and services that are produced.
* Changes in the price level: The price level is the average price of all goods and services in an economy. When the price level changes, the nominal GDP changes, but the real GDP does not. This is because the real GDP is adjusted for changes in the price level, so it only measures the changes in the quantity of goods and services that are produced.
* Changes in the composition of output: The composition of output is the mix of different goods and services that an economy produces. When the composition of output changes, the nominal GDP changes, but the real GDP does not. This is because the real GDP only measures the changes in the quantity of goods and services that are produced, not the changes in the mix of goods and services.
In general, real GDP is a more accurate measure of economic growth than nominal GDP because it takes into account the effects of inflation and changes in the price level.