Current Dollars

Business, Legal & Accounting Glossary

Definition: Current Dollars


Current Dollars

Quick Summary of Current Dollars


Dollar value in other time periods, not converted into present-day dollars. This does not take into consideration the effects of inflation, it simply presents the value as it was at the time. If a person purchased a house for $50,000 in 1970, $50,000 would be the current dollar value, and would not correspond to the value of $50,000 at the present time.




Full Definition of Current Dollars


Current dollars (also known as “nominal dollars”) are dollars in the year they were actually received or paid, unadjusted for price changes. For many years the US economy has experienced inflation, so amounts expressed in current dollars misrepresent their actual purchasing power. For example, someone earning $20,000 in 1955 in current dollars – the dollars actually paid that year – would appear to be lower-middle-class at best. But despite the low amount in current dollars, he or she would have been in the upper-middle-class. To make valid comparisons of economic activity and prices over time, instead of current dollars economists use constant dollars, which adjusts current dollars for the impact of inflation. Since the basket of goods and services used to measure inflation changes over time – there were no personal computers in 1955 – constant dollars have measurement problems like current dollars. But overall they give a much more accurate picture of economic activity than current dollars.


Examples of Current Dollars in a sentence


You may want to experiment with how the current dollars stack up to what they would have been in the old days.

We made a lot in current dollars and that was a really cool thing and we needed to think about that for the future.

The term current dollars, also called nominal dollars, refers to dollars stated at their face value at a given point in time, and not revalued to account for inflation or the time value of money.


Related Phrases


current dollar GDP
constant dollars
deflator


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Definition Sources


Definitions for Current Dollars are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 29th October, 2021 | 0 Views.