How are price level data expressed?
Question: This is another question for my econ mid-term practice exam. Economic data that are adusted for price-level changes are said to be expressed in terms of: historical dollars, variable dollars, nominal dollars, or real dollars. Answer: I’d have to pick “real dollars,” though it’s more common to say “constant dollars.” By the way, the “price level” is calculated by looking at a specific collection of products — not at all products in the economy. Because of that, there’s an on-going argument about how it should be calculated and which products should be included. Some people claim that the official price level statistics aren’t very accurate as a picture of the price level in the whole economy.
