The price of a gallon of gasoline at the pump increased by 10 percent at the same time that the inflation rate was 5 percent. The nominal price of gasoline ________, and the real price of gasoline ________.
A)increased; increased
B)increased; decreased
C)increased; did not change
D)decreased; increased

Question

Quizplus · Accepted Answer

The price of gasoline at the pump increased by more than the general level of prices increased, so both gasoline's nominal and real price increased.

The Price of a Gallon of Gasoline at the Pump