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The Virtual Currency can be exchanged for Real Cash. Community content is available under CC-BY-SA unless otherwise noted. In contrast, by definition, the real value of the commodity bundle in aggregate remains the same over time.
The real values of individual goods or commodities may rise or fall against each other, in relative terms, but a representative commodity bundle as a whole retains its real value as a constant from one period to the next.
Real values can for example be expressed in constant dollars , with the price level fixed at the base date. The real value is the value expressed in terms of purchasing power in the base year.
Real values can be found by dividing the nominal value by the growth factor of a price index. Using the price index growth factor as a divisor for converting a nominal value into a real value, the real value at time t relative to the base date is:.
It measures by how much the buying power of the quantity has changed over a single period. The bundle of goods used to measure the Consumer Price Index CPI is applicable to consumers.
So for wage earners as consumers, an appropriate way to measure real wages the buying power of wages is to divide the nominal wage after-tax by the growth factor in the CPI.
Gross domestic product GDP is a measure of aggregate output.