Macroeconomics also focuses on the difference between nominal GDP (i.e. GDP calculated according to today’s prices, and ignoring inflation) and real GDP (i.e. GDP calculated in actual purchasing power). This is an important distinction, because an economy might be growing in nominal terms while its real GDP (what people can actually purchase domestically or in imports) is declining because of inflation. In this unit, we will discuss these scenarios and participate in the debate over whether the GDP is an accurate measure of well-being.