The real value of an economic variable is
A) the consumer price index.
B) the producer price.
C) expressed in terms of actual market prices at which goods are sold.
D) computed by taking the nominal value and dividing by the appropriate price index.

Question

Quizplus · Accepted Answer

The real value of an economic variable is computed by adjusting the nominal value (the value at current market prices) for inflation or deflation using a price index, such as the consumer price index (CPI), to reflect the value in terms of purchasing power. This process allows for comparison of economic values over time by removing the effect of price level changes.

The Real Value of an Economic Variable Is