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In Year 1, the Price Level Was 120 and the Average

question 119

Multiple Choice

In Year 1, the price level was 120 and the average nominal income was $30,000. In Year 2, the price level was 125 and the average nominal level of income was $32,000. What happened to real
Income from Year 1 to Year 2?


Definitions:

Cash Flows

Cash flows refer to the total amount of money being transferred into and out of a business, especially as affecting liquidity.

Financing Activities

Transactions and events where cash is raised or repaid to investors and creditors, such as issuing shares or borrowing loans.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.

Treasury Stock

Shares that were issued by a company and then repurchased, reducing the amount of outstanding stock on the open market.

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