Nominal

Nominal may refer to:

In engineering, "nominal" is used to describe a measurement (or group of measurements) that matches the predicted value(s) within the expected margin of error.

See also

Gross domestic product

Gross domestic product (GDP) is a monetary measure of the value of all final goods and services produced in a period (quarterly or yearly). Nominal GDP estimates are commonly used to determine the economic performance of a whole country or region, and to make international comparisons. Nominal GDP however do not reflect differences in the cost of living and the inflation rates of the countries; therefore using a GDP PPP per capita basis is arguably more useful when comparing differences in living standards between nations.

GDP is not a complete measure of economic activity. It accounts for final output or value added at each stage of production, but not total output or total sales along the entire production process. It deliberately leaves out business-to-business (B2B) transactions in the early and intermediate stages of production, as well as sales of used goods. In the United States, the Bureau of Economic Analysis (BEA) has introduced a new quarterly statistic called gross output (GO), a broader measure that attempts to add up total sales or revenues at all stages of production.Mark Skousen was the first economist to advocate GO as an important macroeconomic tool. Other countries are following suit, such as the United Kingdom, which now producing an annual statistic called Total Output.

Real versus nominal value

The distinction between real value and nominal value occurs in many fields. From a philosophical viewpoint, nominal value represents an accepted condition, which is a goal or an approximation, as opposed to the real value, which is always present. Often a "nominal" value is "de facto" rather than an exact, typical, or average measurement.

Measurement

In measurement, a nominal value is often a value existing in name only; it is assigned as a convenient designation rather than calculated by data analysis or following usual rounding methods. The use of nominal values can be based on de facto standards or some technical standards.

All real measurements have some variation depending on the accuracy and precision of the test method and the measurement uncertainty. The use of reported values often involves engineering tolerances.

One way to consider this is that the real value often has the characteristics of an irrational number. In real-world measuring situations, improving the measurement technique will eventually begin yielding unpredictable least significant digits. For example, a 1-inch long gauge block will measure to be exactly 1 inch long until the measuring techniques reach a certain degree of precision. As techniques improve beyond this threshold, it will become clear that 1 inch is not the real value of the gauge block length, but some other number approximates it.