A person's real income will increase by 3% if her nominal income: Increases by 5% while the price index falls by 2% Increases by 5% while the price index rises by 2% Increases by 2% while the price index rises by 5% Increases by 2% while the price index falls by 5%

A person's real income will increase by 3% if her nominal income: Increases by 5% while the price index falls by 2% Increases by 5% while the price index rises by 2% Increases by 2% while the price index rises by 5% Increases by 2% while the price index falls by 5%

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Macroeconomic Measurements, Part I: Prices And Unemployment

Section: Chapter Questions

Problem 2QP

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Question

A person's real income will increase by 3% if her nominal income:
O Increases by 5% while the price index falls by 2%
Increases by 5% while the price index rises by 2%
Increases by 2% while the price index rises by 5%
Increases by 2% while the price index falls by 5%

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