If the Price of Your Cell Phone Service Increases from $70

question 65

Multiple Choice

If the price of your cell phone service increases from $70 to $105 over a period of one year and your income rises from $1,500 to $1,525,your nominal income has

• A)Increased,and your real income has increased.
• B)Increased,but your real income has decreased.
• C)Decreased,and your real income has decreased.
• D)Increased,but your real income has remained the same.

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Definitions:

CCA Class

Classified as Capital Cost Allowance, it refers to the categorization in tax systems for claiming depreciation expense for tax purposes.

Borrowed Funds

Money that has been obtained through loans or credit from financial institutions or individuals, which typically needs to be repaid with interest.

Incremental Annual Cash Flow

The additional cash flow an organization receives from taking on a new project or investment, calculated on an annual basis.

CCA Class

A category within the Capital Cost Allowance system in Canada for tax depreciation of assets.