If Deflation Is 0

question 148

Multiple Choice

If deflation is 0.5 percent per year and you receive a 1 percent decrease in your salary,then your

• A)Real income falls,but your nominal income remains unchanged.
• B)Real and nominal income both fall.
• C)Real income remains unchanged,but your nominal income rises.
• D)Real and nominal income both rise.

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Definitions:

Functional Currency

The currency of the primary economic environment in which an entity operates, often used in financial reporting.

Translation Rate

A rate at which one currency is converted into another, used in the preparation of financial statements for companies operating in foreign currencies.

Foreign Operation

A subsidiary, associate, joint arrangement, or branch of a reporting entity, located in a country different from the entity itself.

Propaganda

Data, particularly when it's prejudiced or deceptive, utilized to support a political agenda or perspective.