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Values measured at the prices prevailing in the period, without removing the effect of price changes.
To separate price changes from changes in purchasing power or output, analysts use an appropriate price index to calculate real measures. Nominal figures remain useful: they describe actual amounts invoiced, paid or reported in money. But they cannot answer a volume or affordability question on their own. The price adjustment needs to match the thing being measured.
Suppose a shop sells 100 identical items at J$1,000 each, earning J$100,000. Next year it sells the same 100 items at J$1,100, earning J$110,000. Nominal revenue rises 10%, while the number of items sold is unchanged. Calling that 10% growth in the shop’s physical output would confuse a price change with a production change.
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