If your nominal income remains constant at $3,000 while the price of an important product in your budget,such as cell phone service,rises from $50 to $100,your real income has
A)Decreased by $50.
B)Decreased by $100.
C)Decreased by $150.
D)Remained constant.

Question

Quizplus · Accepted Answer

Real income is the purchasing power of your nominal income. If the price of an important product doubles, your real income decreases by the amount of the price increase, which is $50 in this case.

If Your Nominal Income Remains Constant at $3,000 While the Price