Why do we use the "real" prices of goods to measure how expensive things have become?
A) to find out what the current prices of goods and services are
B) to estimate the periods when hyperinflation has occurred
C) to find out what the inflation rate has been
D) to see whether there have been any changes in our purchasing power

Question

Quizplus · Accepted Answer

Using "real" prices of goods (inflation-adjusted prices) allows us to see whether there have been any changes in our purchasing power over time. In other words, it shows us how much our money can actually buy, rather than just the nominal (or current) price of goods. This helps us understand the true cost of living and how it has changed over time. A, B, and C are all related to measuring current or historical prices and inflation, but do not directly address changes in purchasing power.

Why Do We Use the "Real" Prices of Goods to Measure