LET’S TRY ONE
Use real value = nominal value ÷ price index × 100. Nominal output is 240 and the index is 120. What is the adjusted value?
200
240 ÷ 120 × 100 = 200 in the stated base-price units.
Learning steps & teaching tips
Use supplied price-index, per-person and distribution data without treating one aggregate as a complete account of wellbeing.
- Identify nominal totals, price-adjusted measures and per-person measures.
- Apply the conversion rule supplied in the question.
- State what an average or total leaves unknown about distribution and wellbeing.
Try it together
Create two fictional economies with totals, populations and price indexes. Compare nominal, adjusted and per-person values, then add a distribution note.
Check the denominator, price basis and distribution before interpreting a change in a headline total.