Okuzeka
Economics vocabulary · Inflation and Prices

In real terms

Meaning in economics, with examples

phraseCommon term

In economics, in real terms means: Measured after removing the effect of inflation, so that a figure shows the true change in what money can buy.

In Turkish: reel olarak, reel bazda, enflasyondan arındırılmış olarak

How it is used

Used whenever money values are compared over time: wages rose 30% but fell in real terms; spending on education is flat in real terms. The opposite is in nominal terms, or in cash terms in British English.

Example sentences

  1. Wages rose by 40%, but with inflation at 50% they actually fell in real terms.

  2. In real terms, the health budget is lower today than it was ten years ago.

Common collocations

  • fall in real terms
  • rise in real terms
  • real wages
  • real interest rate
  • nominalMeasured in current money values without adjusting for inflation, such as a salary or a GDP figure expressed in today's prices.
  • inflationA general and continuing rise in the prices of goods and services in an economy, which means each unit of money buys less over time.
  • purchasing powerThe amount of goods and services that a sum of money or an income can buy; it falls when prices rise faster than incomes.
  • GDPShort for gross domestic product: the total value of all final goods and services produced within a country in a given period, usually a quarter or a year.

More terms: Inflation and Prices

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This page explains English vocabulary for learners. It is not financial advice.