Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
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Chapter 7, Problem 2Q
To determine

  1. The two main sources of cash flows for a stockholder and estimation of such cash flows.
  2. To compare the estimation of stock cash flows to the problem of estimating bond cash flows.
  3. To Predict the volatility of bond and stock

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Economists prefer to analyze the performance of the economy using “real” rather than nominal measures of economic activity. First, what does it mean to use real variables using consumption and  wages as cases in point? Warning:  before you throw at me the catch-all “adjusted for inflation” answer, know that I am looking for a thoughtful answer that explains in everyday English the difference between real and nominal and why it matters in the context of wages and interest rates.
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