Cyclopedia

Real Dollar

GAO Glossary of Terms and Definition (September 2005)

Real Dollar (Economics Term)

A dollar value adjusted to remove the effects of inflation by dividing the nominal value (also called the current dollar value) by the appropriate price index. The resulting amount can be labeled real or inflation adjusted. Real dollar values can reflect a measure of purchasing power, such as real income, or a measure of quantity, such as real GDP. Real dollar is frequently called constant dollar when referring to measures of purchasing power.

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