If Real Income Increases,then Nominal Income

question 138

Multiple Choice

If real income increases,then nominal income

• A) increases.
• B) increases if the price index falls.
• C) rises faster than prices.
• D) remains constant but the majority of goods in the consumer price index (CPI)get cheaper.
• E) decreases.

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Definitions:

Discrimination

Unfair or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.

Profitable

A state or condition of yielding a financial profit or gain; it is often considered after all expenses have been deducted.

Opportunity Cost

The cost of foregone alternatives; the value of the best alternative that is not chosen.

Leisure

Free time when individuals are not working, which can be used for rest, recreation, or personal activities.