Principles of Macroeconomics / Unit 6 MAC 0512 short lesson, about 20 seconds
Nominal and Real Values
Captions available
The idea
A nominal value is measured in the money of its own time. A real value is adjusted for price changes, so amounts from different years can be compared.
In practice
A wage that doubles while prices double has not risen at all in real terms.
Where people slip
Nearly every comparison across years that matters is a real one, as unit three showed for output.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Something wrong in this lesson? Flag it · Sources for Principles of Macroeconomics