Suppose a consumer's nominal income is $50,000 and the cost-of-living index is 1.3. The consumer's real income is
A) $50,000
B) $65,000
C) $53,000
D) $38, 462

Name: Suppose a consumer's nominal income is $50,000 and the cost-of-living index is 1.3. The consumer's real income is A) $50,000 B) $65,000 C) $53,000 D) $38, 462
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Quizplus · Accepted Answer

Real income is calculated by dividing the nominal income by the cost-of-living index. Therefore, $50,000 / 1.3 = $38,461.54, which rounds to $38,462.

Suppose a Consumer's Nominal Income Is $50,000 and the Cost-Of-Living