Between 2004 and 2014, Jack's salary increased from $100,000 per year to $200,000 per year.The price index increased from 100 to 300 during the same period.Which statement best describes Jack's situation?
A) Jack's real income increased, and his money income decreased.
B) Jack's real income increased, and his money income increased.
C) Jack's real income decreased, and his money income decreased.
D) Jack's real income decreased, and his money income increased.

Question

Between 2004 and 2014, Jack's salary increased from $100,000 per year to $200,000 per year.The price index increased from 100 to 300 during the same period.Which statement best describes Jack's situation?  
A) Jack's real income increased, and his money income decreased. 
B) Jack's real income increased, and his money income increased. 
C) Jack's real income decreased, and his money income decreased. 
D) Jack's real income decreased, and his money income increased.

Quizplus · Accepted Answer

Jack's money income increased because his salary doubled from $100,000 to $200,000. However, the price index tripled from 100 to 300, indicating that the cost of living increased at a faster rate than his salary, thus his real income decreased.

Between 2004 and 2014, Jack's Salary Increased from $100,000 Per