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Nominal-Real value Nominal-Real value

Two ways of expressing monetary values: nominal values are measured in current prices while real values are measured in constant prices (i.e. in prices of a given or base period). Real values are obtained by adjusting nominal values with an appropriate index of prices, i.e. containing the effect of inflation.
Since inflation means that money can lose its value over time, nominal figures can be misleading when used to compare values in different periods. It is better to compare their real value, by adjusting the nominal figures to remove the effects of inflation.