system
Given the following post, respond as if you're commenting on Reddit:
human
What is the difference between GDP (Nominal), GDP (PPP), and Real GDP ?
gpt
GDP, or "Gross Domestic Product" , is a measure of how much a country produces. "Gross" because we do not measure anything but raw output; "Domestic" because we measure only what happens within the country; and "Product" because we measure how much is being produced. The value of all goods and services, minus the value of the goods and services that were consumed to to produce them, is the GDP.

We measure the value of goods by their market price. If the baker buys flour for 1$, turns it into bread, and sells it for 2$, he has added 1$ to the GDP - remembering that we need to subtract the value of the ingredients. Do this for all products, and you have the simplest measure of GDP: the nominal GDP.

Now, if we are comparing GDP's for different years, we run into a problem. The prices are not directly comparable, because the value of money can change through inflation or deflation. Lets say that inflation increases all prices and wages by 2x. The flour costs twice as much (2$), the bread sells for twice as much (4$), and thus the value added to the GDP is also twice as high (2$). However, this does not really reflect any increase in the productivity of the baker (or how much the bread is worth to the buyer), but is just a measure of inflation - consider that the person buying the bread is also paid twice as much for the same work, now. Without accounting for this inflation, GDP will appear to grow much faster than it actually has, which is a problem. When we account for it, we get "real" GDP: GDP without inflation (or deflation). 

PPP-adjusted GDP is a bit different. PPP means "Purchasing Power Parity" and refers to the fact that the same amount of international money can buy different amount of goods in different countries. 100$ can get you maybe 100 cheeseburgers in the US, but maybe 300 in India, because prices are lower. Sometimes, it can make sense to take this difference in consumer prices into account when comparing the GDP of countries. If you do this, you can more easily compare the standard of living between countries - this is especially relevant when comparing rich and poor countries, as consumer prices tend to be lower in poorer countries, so they might be able to do more than you would think with a low GDP. When you correct for this, you get GDP (PPP).