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How do macroeconomists distinguish between nominal and real values of variables? Does nominal or real GDP give a
better picture of changes in economic activity and economic well-being? Why? Suppose the nominal GDP of Italy increased by 1% between 2011 and 2012. Is this information sufficient to conclude that the economy grew in that period of time? Given that the inflation rate was 3%, what can we conclude on the growth of the economy?
What is the national income identity? Why is it that sales of used assets are not included in GDP?
.Explain the difference between nominal and real interest rate. What is the Fisher Equation?
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