A Nominal Variable Is One That

question 303

Multiple Choice

A nominal variable is one that:

• A) uses prices at the time of sale.
• B) uses the cost of production.
• C) has not been adjusted for inflation.
• D) includes a correction for inflation.

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Definitions:

Present Value

The now-value of a later financial sum or succession of monetary flows, using a determined rate of return as the basis for calculation.

Interest Rate

This is the percentage of a sum of money charged for its use.

Equilibrium Interest Rate

The equilibrium interest rate is the interest rate at which the supply of loanable funds equals the demand, reflecting a balance in the financial market.

R&D Spending

The amount of money that is invested in research and development activities by businesses, organizations, or governments to innovate or improve products and services.