The Amount of Goods and Services People Can Buy with the Money

question 183

Multiple Choice

The amount of goods and services people can buy with the money they have is called their:

• A) nominal income.
• B) consumer price index.
• C) profit margin.
• D) standard of living.

---

Definitions:

Nominal Interest

The interest rate before adjustments for inflation. In contrast, real interest rates take inflation into account.

After-tax Real Interest Rate

The real interest rate that remains after adjusting for both inflation and the impact of taxes, reflecting the actual earning power of an investment after inflation and tax effects.

Inflation Rate

The percentage rate of increase in the general level of prices for goods and services in an economy over a period of time.

Jimmy Carter

Former President of the United States from 1977 to 1981, known for his contributions to peace and humanitarian efforts.