If the Price Level Increases by 15 Percent While Nominal

question 98

Multiple Choice

If the price level increases by 15 percent while nominal income increases by 8 percent, then in percentage terms real income would:

• A)rise by about 8 percent.
• B)fall by about 8 percent.
• C)fall by about 7 percent.
• D)fall by about 15 percent.

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Definitions:

Statistic

A numerical or quantitative measurement describing some characteristic of a sample taken from a population.

Variables

Elements, traits, or conditions that can change and affect the outcome of experiments or studies.

Alcohol Consumption

The act of drinking beverages containing ethanol, which can have various social, cultural, and health impacts.

Reaction Time

The amount of time taken to respond to a specific stimulus.