Comovement Between Nominal and Real Variables

question 32

Multiple Choice

Comovement between nominal and real variables

• A) was once a strong regularity in Canadian data, but is no longer.
• B) was not historically a strong regularity in Canada, but now it is.
• C) cannot be explained.
• D) was observed by Friedman and Schwartz after the 2008-2009 recession.
• E) was observed by Friedman Schwartz in the historical Canadian data.

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Definitions:

Shares

Financial instruments that represent ownership in a company or financial asset, often entitling the shareholder to a portion of the profits.

Control

The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, often through ownership of a majority of voting rights.

IFRS 3

An international financial reporting standard that provides guidance on accounting for business combinations, requiring acquired assets and liabilities to be recorded at fair value.

Business Combinations

Transactions or events in which one entity gains control over one or more other entities, often involving mergers and acquisitions.