Gross domestic product (GDP) is the economic value of goods and services that are produced in a given period of time, including the difference between local and foreign income. However, there is real GDP and nominal GDP. The main difference between real and nominal GDP is that the latter is GDP with adjusted inflation while latter does not require inflation to be adjusted ( Schaefer, 2001) . Another difference is that real GDP is based on year or constant prices while nominal is based on current prices. Therefore, real GDP is the good indicator of economic growth.
As a result, real GDP is more reliable in the comparison of changes over a series of years because it takes into consideration the fluctuating value of goods and services when they are calculated in monetary terms. It is also possible to track. Unlike nominal, real GDP can be used to trace the total value of output produced through the use of a constant price, which makes it isolate the effects of changes in prices ( Schaefer, 2001) . As a result, real GDP is reliable in comparing changes in the living standard, as it captures accurate changes in the level of output.
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Price index refers to the normalized average of goods and services of goods and services over a given period of time. Gas prices are more visible than any other price, even for people who do not use it regularly due to its impact on the economy. The rise or fall in the gas prices always have a significant impact on almost all sectors in an economy because it is frequently purchased ( Husain et al ., 2015) . Therefore, an increase in the price of gas leads to a surge in prices of other commodities and a decrease cause a fall in prices of other goods and services.
Finally, in order to look at the real changes of gas prices in the past, it is important to have the nominal price of gas and the consumer price index (CPI). The real price of a gas, therefore, is obtained by dividing the nominal gas prices by the CPI. For instance, if in 2015 the nominal gas price was 0.663 and that of CPI was 0.652, then the real prices of gas in the same year was 1.017.
References
Husain, M. A. M., Arezki, M. R., Breuer, M. P., Haksar, M. V., Helbling, M. T., Medas, P. A., & Sommer, M. (2015). Global implications of lower oil prices (No. 15). International Monetary Fund.
Schaefer, H. G. (2001). International economic trend analysis . Greenwood Publishing Group.
