When the GDP is calculated for a country, is inflation taken into account?

Question:

When the GDP is calculated for a country, is inflation taken into account? What I mean is, if a country has 2% GDP growth, is that before or after inflation is removed from the equation.Because it seems to me that if a country's GDP grows by 2%, and inflation goes up 2% in that time, they may cancel each other out to actually have neutral growth.

Answer:

The difference is between real and nominal growth. The GDP of a country is the $ value of the goods & services produced by that country in a year. Say, the GDP of a country in 2010 is $100 and that in 2011 is $110. The increase could have happened because a) the country produced more goods in 2011 than it did in 2010 even as prices did not change, or) it produced the same amount of goods in both years but prices of the goods (in $) went up. In case a), we would say that the real growth rate is 10% because none of that is attributable to price level increases (inflation).