Likewise, if a person receives no raise from work each year, they actually have received a pay decrease in real terms while still being paid the same
amount in nominal terms (the dollar value you see on your paycheque)
Not exact matches
When overall prices decline, Ibonds retain their full principal
amount in terms of
nominal dollars and they always pay the full
amount of the interest coupon.
As I noted this past January
in Sixteen Cents: Pushing the Unstable Limits of Monetary Policy, a collapse
in short -
term yields to nearly zero is a predictable outcome of QE2, based on the very robust historical relationship between short -
term interest rates and the
amount of cash and bank reserves (monetary base) that people are willing to hold per dollar of
nominal GDP:
If the annuity payout produces constant
nominal dollars (without an inflation adjustment), the gain
terms should be
in terms of
nominal dollar
amounts.
Dividend
amounts rise steadily
in terms of
NOMINAL (without adjustments for inflation) dollars.
Back then, a few things were different... Discounted rates on 5 year
terms were only 0.50 % to 0.75 % off Bank Posted rates... if you had 3 years remaining
in your 5 year
term, the banker went to the rate sheet, looked at their 3 year POSTED fixed rate and if your rate was higher, then they calculated the IRD (usually, a
nominal amount because the banker only had posted rates to compare with).
Keep
in mind that the fees you will pay are based on the
amount you borrow, but they are
nominal in terms of dollars spent, although the interest rate might appear high, on an annual basis.
Inflation is great for debt because the
amount you owe remains the same
in nominal terms but decreases
in real
terms.
If you had 3 years remaining
in your 5 - year
term, the banker went to the rate sheet, looked at their 3 - year POSTED fixed rate and, if your rate was higher, then they calculated the IRD (usually, a
nominal amount because the banker only had posted rates to compare with).
In the case of a rate /
term refinance the homeowner is normally allowed to receive a
nominal amount at closing, typically $ 1,000 or less, but nothing more.
In nominal terms, the outstanding
amount of mortgage debt nationwide has not surpassed its housing - boom related peak and is a declining share of households and nonprofits» aggregate balance.
As we all know,
in terms of total
nominal amount, the government is the largest debtor
in history.