If the Average Level of Nominal Income Is $30,000 and the Price

question 183

Multiple Choice

If the average level of nominal income is $30,000 and the price level index is 154, the average real income would be about:

• A)$17,343
• B)$18,521
• C)$19,481
• D)$20,955

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Definitions:

Retained Earnings

Retained Earnings refer to the portion of net income that a company keeps after paying out dividends to its shareholders, which is then reinvested in the business or used to pay off debt.

Prior Period

A term referring to the financial events or conditions from a previous accounting period.

Cash Dividend

A cash dividend is a payment made by a company out of its earnings to shareholders, usually in the form of cash.

Stock Dividend

A dividend payment made to shareholders in the form of additional company shares rather than cash.