Definition
- Nominal
- A nominal figure is measured in the actual prices that existed at the time it was recorded.
- Not to be confused with: Real
- A real figure is the same figure after it has been adjusted for inflation.
Example
Can you think of an example of nominal?
A wage on an old pay slip reads £18,000 and a newer one reads £24,000. The cash figure has risen by a third. But if prices rose by a half over the same years, the £24,000 buys less than the £18,000 did, so that wage rose in nominal terms and fell in real terms.
Test yourself
What is the difference between nominal and real?
A nominal figure is in the prices of its own time; a real figure has the price change taken out.