Last year, Jane spent all of her income to purchase 200 units of corn at $5 per unit. This year, she spent all of her income to purchase 180 units of corn at $6 per unit.
A)Jane's nominal income and real income decreased this year.
B)Jane's nominal income decreased this year, but her real income increased.
C)Jane's nominal income and real income increased this year.
D)Jane's nominal income increased this year, but her real income decreased.

Question

Quizplus · Accepted Answer

Last year, Jane spent $1000 (200 units * $5/unit) on corn. This year, she spent $1080 (180 units * $6/unit) on corn, indicating an increase in nominal income. However, she bought fewer units of corn this year, indicating a decrease in real income.

Last Year, Jane Spent All of Her Income to Purchase