If the ____ is/are fixed, a change in nominal income is equivalent to a change in real income.
A)price level
B)interest rates
C)tastes and preferences
D)future expectations

Question

If the ____ is/are fixed, a change in nominal income is equivalent to a change in real income.
A)​price level
B)​interest rates
C)​tastes and preferences
D)​future expectations

Quizplus · Accepted Answer

If the price level is fixed, then a change in nominal income will not result in a change in purchasing power. Therefore, a change in nominal income will be equivalent to a change in real income. This concept is important in understanding the difference between nominal and real variables in macroeconomics.

If the ____ Is/are Fixed, a Change in Nominal Income