Biyaheng Juan-Sided

Real Value

A number of literatures on the field of economics discuss the term Real Value of Money. One definition of this term revolves around the effect of time to the value of money. This time factor is often dubbed as inflation, or the increase of price of a certain commodity. It simply means that a certain value of your money today which can buy you, let’s say, two pieces of bread have a real value equal to that two pieces of bread. But if, as a consequence of inflation, the price of that bread doubled, your money that could buy you two pieces of bread yesterday, has a real value today equal to just one piece of bread. Other way to look at it is that real value is actually the value of a certain commodity as compared with a certain commodity. For instance, one year supply of bread costs around…

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