In economics, nominal value refers to value measured in terms of absolute money amounts, whereas real value is considered and measured against the actual goods or services for which it can be exchanged at a given time. Real value takes into account inflation and the value of an asset in relation to its purchasing power. In macroeconomics, the real gross domestic product compensates for inflation so economists can exclude inflation from growth figures, and see how much an economy actually grows. Nominal GDP would include inflation, and thus be higher.
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Nominal price in the context of Measurement in economics
The measures used in economics are physical measures, nominal price value measures and fixed price value measures. These measures differ from one another by the variables they measure and by the variables excluded from measurements. The measurable variables in economics are quantity, quality and distribution. Excluding variables from measurement makes it possible to better focus the measurement on a given variable, yet, this means a more narrow approach. The table was compiled to compare the basic types of measurement. The first column presents the measure types, the second the variables being measured, and the third column gives the variables excluded from measurement.
Nominal price in the context of Nominal rigidity
In economics, nominal rigidity—also referred to as price stickiness or wage stickiness—describes a situation in which a nominal price is slow to adjust or resistant to change.
Complete nominal rigidity occurs when a price remains fixed in nominal terms for a relevant period of time. For example, the price of a good may be contractually set at $10 per unit for an entire year, regardless of changes in supply and demand conditions. Partial nominal rigidity occurs when prices can adjust, but less than they would under conditions of perfect flexibility. For instance, in a regulated market, there may be legal or institutional limits on how much a price can change within a given year.
Nominal price in the context of Oil speculation
The price of oil, or the oil price, generally refers to the spot price of a barrel (159 litres) of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Reference Basket, Tapis crude, Bonny Light, Urals oil, Isthmus, and Western Canadian Select (WCS). Oil prices are determined by global supply and demand, rather than any country's domestic production level.
Nominal price in the context of Wholesale price index
The wholesale price index (WPI) is the price of a representative basket of wholesale goods.
The WPI is published by the Economic Adviser in the Ministry of Commerce and Industry. The wholesale price index focuses on the price of goods traded between corporations, rather than the goods bought by consumers, which is measured by the consumer price index. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction. This helps in analyzing both macroeconomic and microeconomic conditions.