Real versus nominal

What it means

A nominal figure is measured in current prices; a real figure has been adjusted for inflation and so measures actual volume or purchasing power.

Where it appears in the syllabus

• EconomicsCFA Level I · exam weight 6–9% · Market structures, business cycles, policy, trade and exchange rates.
• Quantitative MethodsCFA Level I · exam weight 11–14% · Returns and benchmarks, time value, distributions, portfolio maths, regression.

Related terms

• Adverse selectionThe problem that arises when the party with better information self-selects into a transaction, leaving the…
• Business cycleThe recurring pattern of expansion, peak, contraction and trough in economic activity.
• Core inflationInflation excluding food and energy prices, which are volatile and often driven by supply rather than demand.
• Fiscal policyGovernment use of spending and taxation to influence aggregate demand.
• Gross domestic productThe market value of all final goods and services produced within a country in a period.
• InflationA sustained rise in the general price level, reducing the purchasing power of money.