The real- nominal principle states that:
A) what matters to people is the face value of money or income.
B) people respond more to implicit costs than to explicit costs.
C) what matters to people is the purchasing power of money or income.
D) people respond more to explicit, or real, costs than to implicit costs.

Question

Quizplus · Accepted Answer

The real-nominal principle states that what matters to people is the purchasing power of money or income, not just its face value. This means that people care about how much goods and services they can buy with their money, not just how much money they have. Therefore, option C is the best choice.

The Real- Nominal Principle States That