With the exception of the real interest rate, all real variables of macroeconomics are calculated by
A)subtracting the inflation rate from the nominal value.
B)dividing a nominal variable by the price level.
C)adding the inflation rate to the nominal value.
D)multiplying the nominal variable by the price level.
E)subtracting off the most volatile components of the variable.

Question

Quizplus · Accepted Answer

Real variables are adjusted for inflation to reflect their true value. The most common way to do this is by dividing a nominal variable by the price level to get the real value. This holds true for variables such as real GDP, real wages, and real interest rates.

With the Exception of the Real Interest Rate, All Real