Question

The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Kyoko spends all of her money on paperback novels and mandarins. In 2012, she earned $14.00 per hour, the price of a paperback novel was $7.00, and the price of a mandarin was $2.00. Which of the following give the nominal value of a variable? Check all that apply.A) The price of a donut is $2.00 in 2012.B) Rina's wage is $14.00 per hour in 2012.C) Rina's wage is 2 paperback novels per hour in 2012.

Answer 1

Answer:

A) The price of a donut is $2.00 in 2012.B) Rina's wage is $14.00 per hour in 2012

Explanation:

Nominal value means face value or stated value.

Real value means nominal value adjusted for inflation. Real value of money can refer to the purchasing power of money. Rina's wage is 2 paperback novels per hour in 2012 is an example of real value.

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