Explain the difference between a nominal value and a real value
What will be an ideal response?
A nominal value is the actual price that is paid or the actual wage received. If today you pay $1 for a can of Pepsi, this amount is a nominal value. A real value is adjusted for changes in the price level. To compare prices or wages across years, the nominal values need to be converted to real values. In other words, you need to compare values in the same dollars. This conversion is necessary because a dollar today is not worth the same as a dollar 20 years ago.
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You are considering buying a store. The storeowner gives you an estimate of the net profits of the store on a typical day. The owner has most likely given you the figures for the day when
a. Sales are low, costs are high b. Sales are very close to costs c. Sales are high, costs are low d. All of the above
If the Fed follows a high-growth monetary policy, but workers believe that the policy is time inconsistent, then low-wage contracts will be in force and unemployment will decline
a. True b. False Indicate whether the statement is true or false
Policymakers should be aggressive in using their powers to place limits on firm behavior, because business practices that appear to reduce competition never have any legitimate purposes
a. True b. False Indicate whether the statement is true or false
Which of the following levels of output represents equilibrium?
a. Y1
b. Y2
c. both Y1 and Y2
d. neither Y1 nor Y2