Topic summary
Nominal value
Extracted from the Wikipedia article Real and nominal value.
Real value
The price index is applied to adjust the nominal value of a quantity, such as wages or total production, to obtain its real value. The real value is the value expressed in terms of purchasing power in the base year. The index price divided by its base-year value gives the growth factor of the price index. Real values can be found by dividing the nominal value by the growth factor of a price index. Using the price index growth factor as a divisor for converting a nominal value into a real value, the real value at time t relative to the base date is:
