what information does real GDP contain that nominal GDP does not?

Real GDP is Nominal GDP after stripping out the effects of rising prices.

For example (assuming I'm the only production in my country). if an apple is worth 2 dollars in the year 2000, and I produce 10 of them. You could say that I produced $20 of apples ($2x10 apples).

Then, in the year 2010, the price of an apple increased by 3 to be worth 5 dollars each, and I produce 10 of them. Nominal GDP says I produced $40 of apples ($4 x 10 apples). However, Real GDP calculation would first eliminate the effect of the $3 increase in prices for apples and say that I produced $20 of apples (($5-$3)x10 apples).


This makes sense because I'm still making 10 apples in 2000 and in 2010. The only thing that changed was prices not my actual productivity, so Real GDP is useful because it peels away those price effects which make it hard to see the real change in productivity. (Note also that neither Real GDP or Nominal GDP account for changes in quality. My apple in 2010 may be larger than my apple in 2000, or I may be using less harmful pesticide, or my apple may be more nutritious. )