What best describes the term “real GDP”?

The term "real GDP" refers to the inflation-adjusted value of goods and services produced within a country over a specific period, usually a year. This adjustment allows for a more accurate comparison of economic output over time, as it removes the effects of price changes and inflation. By measuring the economy's output in constant prices, real GDP provides a clearer view of economic growth and helps to assess the true increase or decrease in productivity and living standards.

In contrast, the other descriptors do not encapsulate the concept of real GDP. For instance, the value of goods at current market prices fails to account for inflation and reflects nominal GDP instead. Similarly, total output without adjustments would simply represent nominal output and could mislead comparisons over different time periods. Lastly, production value from the previous year lacks the context of inflation adjustments and does not reflect the current economic environment. By focusing on the inflation-adjusted nature of production, real GDP enables economists and policymakers to make informed decisions regarding economic health and trends.