Real versus nominal value (economics)
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In economics, nominal value is measured in terms of money, whereas real value is measured against goods or services. A real value is one which has been adjusted for inflation, enabling comparison of quantities as if the prices of goods had not changed on average. Changes in value in real terms therefore exclude the effect of inflation. In contrast with a real value, a nominal value has not been adjusted for inflation, and so changes in nominal value reflect at least in part the effect of inflation.
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See also
- Aggregation problem
- Classical dichotomy
- Constant Item Purchasing Power Accounting
- Cost-of-living index
- Deflation
- Financial repression
- Fisher equation
- Index (economics)
- Inflation
- Inflation accounting
- Inflation hedge
- Interest
- Money illusion
- National accounts
- Neutrality of money
- Numéraire
- Real interest rate
- Real prices and ideal prices
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