Editing Real and nominal value (section)

==Example==

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|If for years 1 and 2 (possibly a span of 20 years apart), the nominal wage and price level ''P'' of goods are respectively
:nominal wage rate: $10 in year 1 and $16 in year 2
:price level: 1.00 in year 1 and 1.333 in year 2,
then real wages using year 1 as the base year are respectively:
:$10 (= $10/1.00) in year 1 and $12 (= $16/1.333) in year 2.

The real wage each year measures the buying power of the hourly wage in common terms. In this example, the real wage rate increased by 20 percent, meaning that an hour's wage would buy 20% more goods in year 2 compared with year 1.
|}