When it comes to understanding wages, two terms often come up: nominal wage and real wage. These terms have a significant impact on the purchasing power of individuals and the overall economy. In this article, we will delve into the differences between nominal wage and real wage, and why it is crucial to comprehend their distinctions. What is Nominal Wage? Nominal wage refers to the amount of money that an individual earns in their job. It is the wage that is stated in the employment contract or agreement. For example, if John’s employment contract states that he will earn $20 per hour, then $20 is his nominal wage. Factors Influencing…