How do inflation and real income relate to each other?
A) Inflation always reduces real income.
B) Inflation reduces the real income of workers when wages increase more than prices do.
C) Inflation reduces the real income of workers when wages increase less than prices do.
D) Inflation increases the real income of workers only when wages increase less than prices do.

Question

How do inflation and real income relate to each other?  
A) Inflation always reduces real income. 
B) Inflation reduces the real income of workers when wages increase more than prices do. 
C) Inflation reduces the real income of workers when wages increase less than prices do. 
D) Inflation increases the real income of workers only when wages increase less than prices do.

Quizplus · Accepted Answer

The Answer of How do inflation and real income relate to each other?  
A) Inflation always reduces real income. 
B) Inflation reduces the real income of workers when wages increase more than prices do. 
C) Inflation reduces the real income of workers when wages increase less than prices do. 
D) Inflation increases the real income of workers only when wages increase less than prices do.

How Do Inflation and Real Income Relate to Each Other