0
A nominal variable is a variable measured in current dollars (the value of the dollar for the specific period discussed), and a real variable is a variable measured in constant dollars (the value of the dollar for the base period). That is, a real variable adjusts for the effects of inflation.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
Example of nominal variable and real variable?
A nominal variable is one where observations are classified to categories eg small, medium and large for t-shirts. A real variable is one that takes numerical values, such as shirt size 12, 14, 16 etc. A real value may be a continuous (as opposed to discrete) variable but the very act of recording the observation usually results in the continuous variable being replaced by a discrete one.
Is population a continuous variable?
No, it is a discrete variable. Since there are no fractional people, a count of people can only be a positive integer. For a variable to be continuous, it must be able to take on *any* real value in a domain. So, if populations could take on any real value, including rational and irrational ones, between 1 and say 10^12, including ones like 6.1385391..., then population would be a continuous variable.
How do you interpret coefficient of dummy variable?
To interpret the coefficient of a dummy variable is to follow all of the steps of the equation that is being used as if the dummy variable was a real one.
What is a random variable?
A random variable is a function that assigns unique numerical values to all possible outcomes of a random experiment. A real valued function defined on a sample space of an experiment is also called random variable.
What is a continuous random variable?
In the simplest setting, a continuous random variable is one that can assume any value on some interval of the real numbers. For example, a uniform random variable is often defined on the unit interval [0,1], which means that this random variable could assume any value between 0 and 1, including 0 and 1. Some possibilities would be 1/3, 0.3214, pi/4, e/5, and so on ... in other words, any of the numbers in that interval. As another example, a normal random variable can assume any value between -infinity and +infinity (another interval). Most of these values would be extremely unlikely to occur but they would be possible. The random variable could assume values of 3, -10000, pi, 1000*pi, e*e, ... any possible value in the real numbers. It is also possible to define continue random variables that assume values on the entire (x,y) plane, or just on the circumference of a circle, or anywhere that you can imagine that is essentially equivalent (in some sense) to pieces of a real line.
What is the difference nominal cash flow and real cash flow?
Difference between real and nominal cash flow is that nominal cash flows uses the inflation information as well for calculation of nominal cash flow of future while real cash flow don't use that information for calculation.
The GDP gap measures the difference between?
nominal GDP and real GDP.
What is the difference between 'real wage' and 'nominal wage'?
blAH BLAH BLHA
How does the real interest rate relate to the nominal interest rate?
A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.
Difference between REER and NEER?
Nominal effective exchange rate (NEER) and Real effective exchange rate (REER)
Example of nominal variable and real variable?
A nominal variable is one where observations are classified to categories eg small, medium and large for t-shirts. A real variable is one that takes numerical values, such as shirt size 12, 14, 16 etc. A real value may be a continuous (as opposed to discrete) variable but the very act of recording the observation usually results in the continuous variable being replaced by a discrete one.
Difference between real executive and Nominal executive?
nominal executive a person who heads the executive branch but does not have the power to execute major and important decisions. normally a king. real executive a leader who holds real power. make a important decisions for the country. Prime Minister.
Can TVM be used to evaluate the real return or just the nominal return?
TVM, or Time Value of Money can certainly be used to calculate a real return. The only difference between a nominal return and a real return is inflation, so simply discount your future cash flows by anticipated inflation and you have a real return. In simpler terms assuming inflation is steady you could simply deduct inflation from your nominal return. For example a nominal 7% return with 3% inflation could be desribed as a 4% real return.
How does the real exchange rate work with standard of living of a country.If the standard of living of a country is more compared with other country how can it be termed interms of real exchange rate?
The real Exchange rate excludes the effects of inflation in the increase in exchange rate so if there is a lot of difference between real and nominal (real << nominal) the standard of living is deteriorating in the country.
What is nominal price and real price?
Real price is in a mud nominal price is in your FACE
What is the difference between real solutions and real roots when dealing with discriminant?
There is no difference between real solutions and real roots.
What is difference nominal cash flow and real cash flow?
Assuming we're using the cash-flows (Cf) and the required return rate (r) to calculate the Net Present Value (NPV), We need to follow the Rule of Consistency, which is to say, if our (r) is stated in real terms, we must use Real (Cf), and vice versa. Helpful formulas: To adjust Real (Cf) to Nominal, we compound it (n) periods, using the rate of inflation (inf), viz: (Cf-real) * (1+inf)^(n) Similarly, to adjust Nominal (Cf) to Real, we discount it viz: (Cf-nominal) / (1+inf)^(n) The Fisher Theorem illustrates the relation between real and nominal rates, viz: (1+r-nom) = (1+r-real) * (1+inf)
