If your nominal income rises faster than the price level,
A)Your real income has fallen.
B)Your real income has risen.
C)You can buy fewer goods and services.
D)There must be deflation.

Question

Quizplus · Accepted Answer

If your nominal income rises faster than the price level, your purchasing power increases, which means that you can buy more goods and services than before. This increase in purchasing power indicates that your real income has risen.

If Your Nominal Income Rises Faster Than the Price Level