Real money is equal to
A)nominal money divided by nominal income.
B)nominal money divided by the price level.
C)the price level divided by nominal money.
D)nominal income divided by the price level.
E)nominal income divided by the velocity of circulation.

Question

Quizplus · Accepted Answer

Real money is calculated by adjusting nominal money for the price level, which means dividing the amount of nominal money by the price level to account for inflation or deflation. This gives a more accurate representation of the purchasing power of the money.

Real Money Is Equal to