Principles of Macroeconomics / Unit 3 MAC 0215 short lesson, about 20 seconds
Nominal and Real
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The idea
A nominal value is measured at the prices of its own time. A real value is adjusted for price changes, so it reflects quantities rather than prices.
In practice
Nominal GDP can rise because output rose, because prices rose, or both.
Where people slip
When the question is whether the country produced more, only the real figure answers it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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