To ensure that a nominal payment represents a constant level of purchasing power over time, one should:
A)add the price index to it.
B)subtract the price index from it.
C)divide it by the price index.
D)increase it by a percentage equal to the rate of inflation for that year.

Question

Quizplus · Accepted Answer

To keep nominal amounts constant in real terms, increase nominal amounts by the rate of inflation each year.

To Ensure That a Nominal Payment Represents a Constant Level