If the annual real income of an individual is £45,000 and the annual inﬂation rate is 3 per cent, compute the nominal income.

Name: If the annual real income of an individual is £45,000 and the annual inﬂation rate is 3 per cent, compute the nominal income.
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Quizplus · Accepted Answer

Nominal income is calculated by adjusting the real income for the inflation rate. The formula to calculate nominal income is: Nominal Income = Real Income * (1 + Inflation Rate). Therefore, £45,000 * (1 + 0.03) = £45,000 * 1.03 = £46,350.

If the Annual Real Income of an Individual Is £45,000