Other things equal, suppose that the general level of prices decreases. You would be correct if you concluded that the real value of your income:
A) decreases.
B) remains constant.
C) increases.
D) may either increase or decrease, depending on the percentage fall in prices.

Question

Quizplus · Accepted Answer

When the general level of prices decreases, the real value of your income increases because your money can buy more goods and services than before, assuming your nominal income remains constant.

Other Things Equal, Suppose That the General Level of Prices