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Definition of Nominal Dollars







What are "nominal dollars"? What is the definition of the term "nominal dollars"?

You can have "nominal dollars" and you can have "real dollars".

"Nominal dollars" are dollars that are unadjusted for inflation, while "real dollars" are dollars that have been adjusted for inflation.

-- Finance term definition - Nominal Dollars --Let's look at an example.

A house may have cost $25,000 "nominal dollars" in 1989.

If you adjusted for inflation, then the house may have cost $75,000 "real dollars".

The "nominal GDP" of the United States in 1970 may have been $1 trillion. However, the real GDP (after adjusting for inflation) may have been closer to $4-$5 trillion. I'm just making up numbers here, but you get the point.

"Nominal dollars" have not been adjusted for inflation.

"Real dollars" HAVE been adjusted for inflation.


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