If deflation occurs and your income is fixed, your real income:
A) will fall.
B) will go up.
C) will still be equal to your nominal income.
D) is constant.

Question

Quizplus · Accepted Answer

Deflation means the general level of prices is falling. If your income is fixed, your money can buy more goods and services than before, effectively increasing your real income. Real income refers to the purchasing power of your income, which goes up during deflation.

If Deflation Occurs and Your Income Is Fixed, Your Real