What kind of currency are nominal dollars?
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amby
Apprentice
Joined: 05 Jun 2004
Posts: 11
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 Posted: 07/17/08 - 09:15 Post subject: |
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| While reading an article in newspapers besides a dollar there was mentioned a certain currency called nominal dollar. What kind of currency are nominal dollars? I don’t know the first thing about the money, currencies and economy and I’d like to start learning and I think that this is not a difficult subject, at least it seems to me that the definition can’t be too complicated. |
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warren
Apprentice
Joined: 13 Feb 2008
Posts: 7
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| Posted: 08/16/08 - 02:10 Post subject: |
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| Well, you are right to a certain extent. There are many more difficult concepts and definitions in economy and this about nominal currencies can be explained even to a layman without using some bombastic and incompressible explanations. So, contrasted to nominal dollars there are so-called real currencies. The basic difference is in the fact that a nominal currency is the value of that particular currency on that particular day. On the other hand real currency is the currency whose value is being adjusted according to inflation. I suppose that real dollar is the currency for expressing the purchasing power. Nominal dollar represents the value of money in which inflation hasn’t been taken into consideration. |
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