The formula for determining a real variable is real variable =
A) (nominal variable $\div$ 100)$\times$ CPI
B) (nominal variable $\times$ CPI)$\div$ 100
C) (nominal variable $\div$ price index)$\times$ 100
D) (nominal variable $\div$ price index)+ 100
E) (nominal variable $\div$ price index)$\div$ 100

Question

The formula for determining a real variable is real variable =
A) (nominal variable $\div$  100)$\times$ CPI
B) (nominal variable $\times$ CPI)$\div$  100
C) (nominal variable $\div$  price index)$\times$ 100
D) (nominal variable $\div$  price index)+ 100
E) (nominal variable $\div$  price index)$\div$  100

Quizplus · Accepted Answer

The real variable is calculated by dividing the nominal variable by the price index and then multiplying by 100 to adjust for inflation.

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