You Get a Pay Raise and Feel Richer Even Though

question 4

Multiple Choice

You get a pay raise and feel richer even though your raise did not keep up with inflation; this is best described as

• A) menu costs.
• B) price confusion.
• C) future price uncertainty.
• D) money illusion.
• E) nominal income uncertainty.

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Definitions:

Payment by Check

A method of making payments using a check, which is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer.

Bank Statement

A monthly summary from a bank showing all transactions in an account.

Electronic Funds Transfer

The electronic transfer of money from one bank account to another, either within the same financial institution or across different institutions.

Net Sales

The sum of sales income left over after subtracting returns, compensations for damaged or missing items, and price reductions.