If Your Nominal Income in 2002 Is $50000, and Prices

question 95

Multiple Choice

If your nominal income in 2002 is $50000, and prices increase by 50 percent between 2002 and 2013, then to have the same real income, your nominal income in 2013 must be ________.

• A) $50000
• B) $75000
• C) $100,000
• D) $150,000

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Definitions:

Employment Decline

A reduction in the number of jobs or the rate of employment within an economy.

Economic Profit

The discrepancy between overall income and the sum of all expenses, covering both direct and indirect costs.

Profit-maximizing

The process or strategy of adjusting production and sales to achieve the highest possible profit levels under given conditions.

Elasticity

An indicator of the extent to which the demand or supply of a product or service shifts when there is a variation in its price.