[1] This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output.
Due to inflation, nominal GDP can increase even when physical output is fixed, and so does not actually reflect the true growth in an economy.
Different organizations use different types of 'Real GDP' measures, for example, the UNCTAD uses 2015 Constant prices and exchange rates while the FRED uses 2009 constant prices and exchange rates, and recently the World Bank switched from 2005 to 2010 constant prices and exchange rates.
Nominal gross domestic product is defined as the market value of all final goods produced in a geographical region, usually a country; this depends on the quantities of goods and services produced, and their respective prices.
It gives an indication of the overall level of price change (inflation or deflation) in the economy.