Economic variables we are most interested in are
A)real variables,but we usually observe nominal variables.
B)nominal variables,but we usually observe real variables.
C)real variables,which we usually observe.
D)nominal variables,which we usually observe.

Question

Quizplus · Accepted Answer

Economic variables can be either real or nominal, but we are usually more interested in real variables such as real GDP, real wages, and real interest rates, as they reflect changes in the actual physical output, purchasing power, and profitability of economic activity. However, because many economic transactions and agreements are denominated in nominal terms (e.g. prices, wages, interest rates), we often observe and report nominal variables, which can be misleading if we do not adjust for changes in inflation or deflation. Therefore, we need to use measures of price level or inflation to translate nominal variables into real ones, so that we can make meaningful comparisons and assessments of economic performance.

Economic Variables We Are Most Interested in Are