Nominal national income
Definition. Nominal national income is the total value of national income measured at current prices, that is, the prices prevailing in the year of measurement, without any adjustment for changes in the general price level. It is also called money national income.
Because it is unadjusted for inflation, a rise in nominal national income may reflect higher prices rather than greater output. Dividing by a price index to obtain real national income removes this distortion and allows valid comparisons over time.
This term belongs to National Income and GDP in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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