The Difference Between Nominal and Real Values Is That Real

question 369

Multiple Choice

The difference between nominal and real values is that real values take into account

• A) depreciation.
• B) changes in the composition of output.
• C) changes in prices between years.
• D) the presence of durable goods.

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Definitions:

Minimum Cost

The lowest possible expense that can be incurred in the production of a good or service without sacrificing the quality or quantity.

Cost of Producing

The total expense incurred in the manufacture or production of a good, including raw materials, labor, and overhead.

Metal Alloy

A substance composed of two or more metals or a metal and a non-metal, mixed together to attain desired physical or chemical properties.

Fixed Proportions

A production technology assumption where inputs must be used in constant, unchanging ratios to produce outputs.