A price increase causes a consumer's "real" income to:
A) decrease.
B) increase.
C) remain unchanged.
D) vary along the budget line.

Name: A price increase causes a consumer's "real" income to: A) decrease. B) increase. C) remain unchanged. D) vary along the budget line.
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Question

Quizplus · Accepted Answer

Real income is the amount of goods and services a consumer can purchase with their nominal income. When prices increase, the purchasing power of the consumer's nominal income decreases, resulting in a decrease in their real income.

A Price Increase Causes a Consumer's "Real" Income To