Nominal income is the actual number of dollars of income received during a year. Real income is the actual number of dollars received, adjusted for any change in price.

Question

Quizplus · Accepted Answer

Nominal income refers to the amount of money earned in current dollars, without adjusting for inflation or changes in purchasing power, while real income adjusts nominal income for changes in price levels to reflect the actual purchasing power of the income.

Nominal Income Is the Actual Number of Dollars of Income