The price of a gallon of gasoline at the pump increased by 10 percent at the same time that the inflation rate was 15 percent. The nominal price of gasoline ________, and the real price of gasoline ________.
A)increased; also 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 less than the general price level, thus while the nominal price increased, the real price decreased.

The Price of a Gallon of Gasoline at the Pump