If we look at governmental budgets over time using nominal figures,we
A) have a clearer understanding of the real size of the budget
B) are able to focus on the real impact of government spending on potential GNP
C) tend to overestimate the size of the budgetary growth
D) usually underestimate the size of the burden of the debt
E) are ignoring what we can learn from nominal data

Question

Quizplus · Accepted Answer

Nominal figures do not take into account inflation, so over time they tend to overestimate the size of budgetary growth. Therefore, it is important to adjust nominal figures for inflation to get a more accurate understanding of changes in government spending over time.

If We Look at Governmental Budgets Over Time Using Nominal