How do macroeconomists distinguish between nominal and real values of variables?

a. real variables are always adjusted to reflect seasonal variation while nominal variables are not.

b. nominal variables are always adjusted to reflect seasonal variation while real variables are not.

c. nominal variables are measured in market prices; real variables are measured in quantities of goods and services.

d. nominal variables are measured in quantities of goods and services; real variables are measured in market prices because that is how they are really counted?

Question

Business

Potter

31 December, 20:04

How do macroeconomists distinguish between nominal and real values of variables?

a. real variables are always adjusted to reflect seasonal variation while nominal variables are not.

b. nominal variables are always adjusted to reflect seasonal variation while real variables are not.

c. nominal variables are measured in market prices; real variables are measured in quantities of goods and services.

d. nominal variables are measured in quantities of goods and services; real variables are measured in market prices because that is how they are really counted?

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Answers (1)

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Carson Barker · Answer 1

I believe the answer is: c. nominal variables are measured in market prices; real variables are measured in quantities of goods and services.

the nominal value of a certain good would be fluctuated (could either increased or decreased) depending on the power of the supply and demand in the market. the real value on the other hand is valued using the price of a base year.