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Nominal |
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Definition of NominalNominalIn name only. Differences in compounding cause the nominal rate to differ from the effective NominalMeasured in money terms, in current rather than real dollars. Contrast with real.
Related Terms:Deferred nominal life annuityA monthly fixed-dollar payment beginning at retirement age. It is nominal Nominal annual rateAn effective rate per period multiplied by the number of periods in a year. Nominal cash flowA cash flow expressed in nominal terms if the actual dollars to be received or paid out are given. Nominal exchange rateThe actual foreign exchange quotation in contrast to the real exchange rate that has Nominal interest rateThe interest rate unadjusted for inflation. Nominal pricePrice quotations on futures for a period in which no actual trading took place. Nominal Interest RateThe rate of interest quoted, or stated, to be paid on a security nominal interest rateRate at which money invested grows. Exchange Rate, NominalThe price of one currency in terms of another, in this book defined as number of units of foreign currency per dollar. Interest Rate, NominalPayment for the use of borrowed funds, measured as a percentage per year of these funds. Nominal Interest RateThe contracted, or stated, interest rate, undeflated for price level changes. Fisher effectA theory that nominal interest rates in two or more countries should be equal to the required real Guaranteed insurance contractA contract promising a stated nominal interest rate over some specific time Real interest rateThe rate of interest excluding the effect of inflation; that is, the rate that is earned in terms Face ValueThe nominal value of a security. Also called the par value. Par Valuenominal value of a security. Same as face value. Coupon rateThe nominal interest rate that the issuer promises to pay the Yield a. Measure of return on an investment, stated as a percentage of price. international Fisher effectTheory that real interest rates in all countries should be equal, with differences in nominal rates reflecting differences in expected inflation. DeflatorA price index used to deflate a nominal value to a real value by dividing the nominal value by the price deflator. Exchange Rate, RealThe nominal exchange rate corrected for price level differences. GDP DeflatorPrice index used to deflate nominal GDP to real GDP by dividing nominal GDP by the GDP deflator. Interest Rate, Realnominal interest rate less expected inflation. Money Rate of InterestSee interest rate, nominal. Quantity Theory of MoneyTheory that velocity is constant, and so a change in money supply will change nominal income by the same percentage. Formalized by the equation Mv = PQ. RealMeasured in base year, or constant, dollars. Contrast with nominal. Real GDPGDP expressed in base-year dollars, calculated by dividing nominal GDP by a price index. Real IncomeIncome expressed in base-year dollars, calculated by dividing nominal income by a price index. VelocityThe number of times during a year that the money supply turns over in supporting that year's economic activity, measured as the ratio of nominal income to the money supply. Face ValueThe nominal value which appears on the face of a document recording an entitlement, generally an amount of money that has to be repaid on the maturity of a debt instrument.
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