In the country of Krypton,the price of lead increased from $20 per kilogram to $22 per kilogram during a time when the overall price level increased by 8 percent.During this period,what happened to the real price of lead?
A)It has increased by about 2 percent.
B)It has decreased by about 6 percent.
C)It has decreased by about 8 percent.
D)It has increased by about 10 percent.

Question

Quizplus · Accepted Answer

The nominal price of lead increased by 10% (from $20 to $22), while the overall price level increased by 8%. The real price increase is the nominal increase minus the inflation rate, which is approximately 2%.

In the Country of Krypton,the Price of Lead Increased from $20