Measurement of economic values after adjustments have been made for changes in the average of prices between years in known as
A) the price index.
B) a deflator.
C) nominal values.
D) real values.

Question

Quizplus · Accepted Answer

Adjusting for changes in prices between years is done to calculate real values, which reflect the purchasing power of economic values in different time periods. The deflator and price index are measures used to adjust for changes in prices, but they are not the final measurement of economic values after the adjustments have been made. Nominal values are the values without any adjustment for changes in prices, and do not reflect the true purchasing power of those values. Therefore, the best choice is D, real values.

Measurement of Economic Values After Adjustments Have Been Made for Changes