Question

You put money in the bank. The increase in the dollar value of your savings a. and the change in the number of goods you can buy with your savings are both nominal variables. b. and the change in the number of goods you can buy with your savings are both real variables. c. is a nominal variable, but the change in the number of goods you can buy with your savings is a real variable. d. is a real variable, but the change in the number of goods you buy with your savings is a nominal variable.

Answer 1

Answer:

c) is a nominal variable, but the change in the number of goods you can buy with your savings is a real variable.

Explanation:

When one put money in the bank. The increase in the dollar value of one savings is a nominal variable, but the change in the number of goods you can buy with your savings is a real variable.Nominal variable in finance can be regarded as variable which which falls below the real value or price/cost, As the money is put in the bank, increase in the dollar value of one savings is a nominal variable since there is a change in the value of the actual money now. Real variable on the other hand is one where there is no effect of inflation/ prices.