What are Current Dollars?
The concept of current dollars has to do with understanding the value of a given currency in terms of economic conditions that are contemporary with the period cited. As such, current dollars are not adjusted for inflation. This makes the process of calculating current dollars a viable means of comparing the adjusted cost of goods from two different time frames. Sometimes referred to as nominal dollars, current dollars can be an important tool when it comes to understanding how a particular currency is functioning over a period of time. Generally, many people do not think in terms of current dollars. Instead, they tend to think in terms of the cost of a good or service costing two to three times more than the same product cost ten or twenty years ago. Employing current dollars can sometimes reveal that when the factor of inflation is removed from the comparison, the currency may have retained more purchasing power than was immediately perceived. Changes in economic conditions make it i
The concept of current dollars has to do with understanding the value of a given currency in terms of economic conditions that are contemporary with the period cited. As such, current dollars are not adjusted for inflation. This makes the process of calculating current dollars a viable means of comparing the adjusted cost of goods from two different time frames. Sometimes referred to as nominal dollars, current dollars can be an important tool when it comes to understanding how a particular currency is functioning over a period of time. Generally, many people do not think in terms of current dollars. Instead, they tend to think in terms of the cost of a good or service costing two to three times more than the same product cost ten or twenty years ago. Employing current dollars can sometimes reveal that when the factor of inflation is removed from the comparison, the currency may have retained more purchasing power than was immediately perceived.
