Which of the Following Is Correct

question 86

Multiple Choice

Which of the following is correct?

• A)Real and nominal incomes always move in the same direction.
• B)Inflation increases the purchasing power of the dollar and necessarily reduces one's nominal income.
• C)Inflation reduces the purchasing power of the dollar and necessarily reduces one's real income.
• D)Inflation reduces the purchasing power of the dollar, but does not necessarily reduce one's real income.