Principles of Macroeconomics / Unit 18 MAC 1718 short lesson, about 20 seconds
Real Against Nominal
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The idea
A nominal figure is measured in the prices of its own year. A real figure is adjusted so that quantities from different years can be compared. Every macroeconomic series comes in both forms.
In practice
Unit six applied it to interest rates, unit three to output, unit fourteen to budgets.
Where people slip
Comparing two nominal figures from different years measures prices and quantities at once.
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