Question 578 inflation, real and nominal returns and cash flows
Which of the following statements about inflation is NOT correct?
(a) Real returns approximately equal nominal returns less the inflation rate.
(b) Constant prices are the same as real prices.
(c) Current prices are the same as nominal prices.
(d) If your nominal wage grows by inflation, then your real wage won't change because you will be able to buy the same amount of goods and services as before.
(e) Interest rates advertised at the bank are usually quoted in real terms.