ECON 102 Introduction to Macroe Assignment #2 KQuestion 7 (of 10) 10.00 points i

Question

ECON 102 Introduction to Macroe Assignment #2 KQuestion 7 (of 10) 10.00 points is larger than the inflation rate (as measured by the change in CPI or GDP deflator), the real value of income has O decreased since real income has grown less than inflation. increased since nominal income has grown more than inflation. o decreased since nominal income has grown more than inflation. since real income has grown more than inflation. References eBook & Resources Learning Objective: 08-04 Calculate the inflation rate by three methods and adjust nominal variables into real variables using a price index. Multiple Choice Section: Using Price Indexes DOLL

Explanation / Answer

Answer : 7) The correct option is B.

Because real value increase if nominal value increase. But this real value decrease if inflation rate increase. Here it is given that the income growth rate, i.e., nominal growth rate of income is grater than inflation growth rate. This means that here real growth rate of income increases as real growth rate of income comes from nominal growth rate of inome which is higher than the inflation rate.

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