Definition of Real income:
Real income is an economic measure that provides an estimation of an individual’s actual purchasing power in the open market after accounting for inflation. As such, the measure subtracts an economic inflation rate per dollar from an individual’s real wage, typically resulting in a lower value and decreased spending power. There are a few inflation measures an individual can use when seeking to calculate real income.
Real income is how much money an individual or entity makes after accounting for inflation. It is sometimes called real wage when referring to an individual's income. Individuals often closely track their nominal vs. real income to have the best understanding of their purchasing power.
Income expressed in terms of the goods or services it can purchase.
How to use Real income in a sentence?
- Theoretically, when inflation is rising, real income and purchasing power fall by the amount of the inflation increase on a per dollar basis.
- Real income is how much money an individual or entity makes after accounting for inflation.
- Most real income calculations are based on inflation reported by the Consumer Price Index.
Meaning of Real income & Real income Definition