Skip to main content
Back

Nominal Income and Real Income definitions

Control buttons has been changed to "navigation" mode.
1/14
  • Inflation
    A rise in overall prices that reduces the ability of money to buy goods and services.
  • Purchasing Power
    The quantity of goods and services that can be acquired with a given amount of money.
  • Nominal Income
    The dollar amount earned in a period, unadjusted for changes in price levels.
  • Real Income
    The income value adjusted for inflation, reflecting actual buying capacity.
  • Consumer Price Index
    A measure tracking changes in the average prices paid by consumers for goods and services.
  • Price Index
    A numerical value representing the relative price level compared to a base year.
  • Base Year
    The reference period used for comparison in price index calculations.
  • Percentage Change
    A method for quantifying the relative increase or decrease between two values.
  • Economic Welfare
    The overall well-being and standard of living of individuals in an economy.
  • Consumer Surplus
    The difference between what consumers are willing to pay and what they actually pay.
  • Income Elasticity of Demand
    A measure of how the quantity demanded of a good responds to changes in income.
  • Price Level
    The average of current prices across the entire spectrum of goods and services.
  • Raise
    An increase in the amount of money earned, often to offset inflation.
  • Estimation
    A process for quickly approximating values when detailed data is unavailable.