Suppose your nominal income this year is 5 percent higher thanlast year. If the

Question

Suppose your nominal income this year is 5 percent higher thanlast year. If the inflation rate for the period was 3 percent, thenyour real income was: a. increased by 1.67 percent b. increased by 2 percent c. increased by 8 percent d. declined by 0.6 percent Please show me how u did it. with the formula and how u didit Thanks Suppose your nominal income this year is 5 percent higher thanlast year. If the inflation rate for the period was 3 percent, thenyour real income was: a. increased by 1.67 percent b. increased by 2 percent c. increased by 8 percent d. declined by 0.6 percent Please show me how u did it. with the formula and how u didit Thanks

Explanation / Answer

Real income% =nominal%-inflation% :
5%-3%=2%                               Please Rate : therefore real income increase by 2%

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