Janet Is Receiving a 5% Pay Raise

question 299

Multiple Choice

Janet is receiving a 5% pay raise. If the rate of inflation is 2%, then Janet's purchasing power is

• A) falling.
• B) rising.
• C) unaffected by either inflation or the pay raise because they are expressed in nominal and not in real terms.
• D) impossible to determine without further information.

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Definitions:

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The growth and change in mental capabilities over time, including learning, memory, problem-solving, and decision-making.

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