Should people typically pay more attention to their real income or their nominal income? If you choose the latter, why would that make sense in today’s world? Would your answer be the same for the 1970s?
What will be an ideal response?
Ans: People should pay more attention to their real income because real income tells the real purchasing power or capability of our income , that is what we can purchase from our income.In real income, effects of inflation is removed from nominal income,whereas nominal income is affected by inlation.
if we choose nominal income in today's world. , then we know how much worth our nominal income have in toady's world. we know what we can buy from Rs. 500 note. but if we are analysing income for 1970's then choosing nominal income would be a mistake. it woud be appropriate if we choose real income. also for comparison between two years , real income is used
You might also like to view...
Which type of graph is most useful in determining if two variables are correlated?
A) variable-correlation figure B) time-series C) scatter diagram D) cross-section E) None of the above answers is correct.
In the figure above, with international trade U.S. consumers buy ________ million T-shirts per year at ________ per T-shirt
A) 60; $5 B) 40; $8 C) 20; $5 D) 40; $5 E) 60; $11
Pat calculates that for every extra dollar she earns, she owes the government 33 cents. Her total income now is $35,000 . on which she pays taxes of $7,000 . Determine her average tax rate and her marginal tax rate
a. Her average tax rate is 33 percent and her marginal tax rate is 20 percent. b. Her average tax rate is 20 percent and her marginal tax rate is 33 percent. c. Her average tax rate is 20 percent and her marginal tax rate is 20 percent. d. Her average tax rate is 33 percent and her marginal tax rate is 33 percent.
As output rises,
A. marginal revenue product declines. B. marginal revenue product stays the same. C. marginal revenue product rises. D. there is no way to determine if marginal revenue product will fall, rise, or remain the same.