Your real income is
A)The amount of money you receive during a given time period.
B)Measured in current dollars.
C)The purchasing power of the money you receive.
D)The same as your nominal income in times of high inflation.

Question

Quizplus · Accepted Answer

Real income takes into account the effects of inflation on purchasing power. It is the amount of goods and services you can afford to buy with the money you receive. Therefore, it is the purchasing power of the money you receive. A is incorrect because the amount of money received doesn't necessarily take into account inflation. B is incorrect because measuring income in current dollars doesn't necessarily consider inflation. D is incorrect because nominal income is not adjusted for inflation, while real income is adjusted for inflation.

Your Real Income Is