If the average level of nominal income in a nation is $44,000 and the price level index is 175, the average real income would be about
A) $18,857.
B) $25,143.
C) $44,000.
D) $77,000.

Question

Quizplus · Accepted Answer

Real income is calculated by dividing nominal income by the price level index and then multiplying by 100. Therefore, 
Real income = (Nominal income / Price Level Index) * 100
Real income = (44,000 / 175) * 100
Real income = 25142.86 ≈ $25,143

If the Average Level of Nominal Income in a Nation