What is the definition of nominal income?
Understand the Problem
The question is asking for the definition of nominal income, which refers to income measured in current dollars or unadjusted for inflation. It is important to explain how it differs from real income, which accounts for inflation.
Answer
Nominal income is the total amount of money earned unadjusted for inflation.
Nominal income is the total amount of money earned by an individual or entity that has not been adjusted for inflation.
Answer for screen readers
Nominal income is the total amount of money earned by an individual or entity that has not been adjusted for inflation.
More Information
Nominal income does not consider the effects of inflation, making it different from real income, which is inflation-adjusted.
Tips
A common mistake is confusing nominal income with real income, which factors in inflation and provides a more accurate measure of purchasing power.
Sources
- Nominal income Definition - Nasdaq - nasdaq.com
- What is the difference between nominal and real income? - Tutor2u - tutor2u.net
- Nominal Income | Encyclopedia.com - encyclopedia.com
