Ceteris paribus,if the prices of the goods a consumer purchases increase,then the consumer's real income
A) decreases.
B) increases.
C) remains the same.
D) might increase or decrease.

Question

Quizplus · Accepted Answer

Ceteris paribus, if the prices of the goods a consumer purchases increase, the real purchasing power of the consumer falls. Real income is the amount of goods and services that can be bought with money income. If prices go up, the same amount of money will buy fewer goods and services. Therefore, the consumer's real income will fall.

Ceteris Paribus,if the Prices of the Goods a Consumer Purchases