Real and Nominal

Interest Rates Real Rates = Nominal + Inflation Wages Nominal Wage Rate = Real Wage Rate + Inflation. Why can’t they keep it same? Already my brain is overflowing with information and now I have to remember this difference as well. I am sick…when will it be 5pm Saturday???

Ok I messed up… it should be other way round Interest Rates Nominal = Real Rates + Inflation Wages Real Wage Rate = Nominal Wage Rate + Inflation.

are you sure it’s plus and not a divide: real wage rate = nominal wage / inflation so that in essence, nominal always means with inflation, and real is inflation-adjusted: nominal wage = real wage x inflation

Going back to CFAI book 2 page 366, i guess you are right. I got confused. Thanks anyways.