Norma Complains That She Is Not Receiving the Full Benefit

question 88

Multiple Choice

Norma complains that she is not receiving the full benefit of her six percent raise,because inflation is two percent.You tell her that nominal incomes tend to rise with inflation,therefore

• A)she really is worse off.
• B)her real income increased eight percent.
• C)menu costs have reduced her purchasing power.
• D)she is committing the inflation fallacy.

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Definitions:

Taste Buds

Small sensory organs located on the tongue that allow humans to perceive different tastes.

Digestive

Pertaining to digestion.

Preicteric

Referring to the initial phase of a disease, particularly liver disease, that occurs before the onset of jaundice, where the skin turns yellow.

Jaundice

A medical condition characterized by yellowing of the skin and the whites of the eyes caused by an increase in bilirubin in the bloodstream.