Last year the Jones family earned $40,000. This year their income is $42,000. In an economy with an inflation rate of 10 percent, which of the following is correct?
A. The Jones' nominal income and real income have both fallen.
B. The Jones' nominal income and real income have both risen.
C. The Jones' nominal income has increased and their real income has fallen.
D. The Jones' nominal income has decreased and their real income has risen.
Answer: C
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Which development strategy involves shifting from production of raw materials to production of manufactured goods?
a. export-led growth b. first-mover advantage c. import substitution d. multiplier effect
Exhibit 14A-1 Aggregate demand and supply model
?Beginning from short-run equilibrium at point E2 in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as:
A. ?a movement along the AD2 curve with a shift in the SRAS1 curve. B. ?a movement along the SRAS2 curve with a shift in the AD2 curve. C. ? a shift in the LRAS curve to an intersection at E1. D. ?no shift of any kind.
If inflation is higher in the home market, what is expected to happen to the real value of the home currency as time passes?
What will be an ideal response?