Suppose that between 2004 and 2014, Jack's salary increased from $100,000 to $200,000 per year and the price index increased from 100 to 300 during the same period. Which of the following statements best describes Jack's situation?
A)his real income and money income have both increased
B)his real income increased and money income decreased
C)his real income and money income both decreased
D)his real income decreased and money income increased
E)his real income and money income remained unchanged

Question

Quizplus · Accepted Answer

Jack's money income increased from $100,000 to $200,000, but his real income decreased because the price index increased from 100 to 300, indicating that the purchasing power of his income has decreased.

Suppose That Between 2004 and 2014, Jack's Salary Increased from $100,000