Explain the real-nominal principle
What will be an ideal response?
The real-nominal principle explains that what matters to people is the real value of money or income—its purchasing power—and not the face value of money or income.
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The reform of the welfare system passed by Congress and signed by President Clinton changed the benefits for welfare recipients as it
a. decreased the number of people eligible for benefits, increased the benefit amount for those still eligible, and set a maximum coverage period of five years b. decreased the number of people eligible for benefits, cut the benefit amount for those still eligible, and set a maximum coverage period of three years c. increased the number of people eligible for benefits, cut the benefit amount for those still eligible, and set a maximum coverage period of three years d. decreased the number of people eligible for benefits, cut the benefit amount for those still eligible, and set a maximum coverage period of five years e. froze the number of people eligible for benefits, cut the benefit amount for those still eligible, and set a maximum coverage period of three years
Inflation tends to redistribute real income from lenders to borrowers
a. True b. False Indicate whether the statement is true or false