Final answer:
Nominal values are measured in terms of actual prices at the time, while real values have been adjusted for inflation. An example of a nominal shock could be an unexpected increase in oil prices, while a real shock could be a technological advancement that increases productivity and output.
Step-by-step explanation:
The distinction between nominal and real values is crucial when examining economic statistics. Nominal values are measured in terms of actual prices at the time, while real values have been adjusted for inflation. For example, nominal GDP measures economic output using current market prices, while real GDP adjusts for inflation to give a more accurate representation of economic performance over time.
An example of a nominal shock could be an unexpected increase in oil prices. This would lead to higher inflation, which in turn would increase nominal GDP. On the other hand, a real shock could be a technological advancement that increases productivity and output, leading to an increase in real GDP without a corresponding increase in prices.