Real GDP measures the total value of all goods and services produced in the economy, adjusted for inflation, focusing on the economy's actual outputs. During the Great Depression, there was a notable decline in real GDP.
- Output Reduction: The reduction in aggregate supply and demand led to fewer goods and services being produced and consumed.
- Economic Contraction: This shift indicated an economic contraction, signifying decreased national income and output.
- Long-Lasting Impact: The reductions in real GDP meant that the economy was underperforming for an extended period, with slower recovery than previous downturns.
Real GDP is a crucial indicator of economic health, and its decline during the Great Depression highlighted the severe economic challenges of that time.