The amount of money received in a particular period adjusted for changes in purchasing power is called:
A) nominal income.
B) real income.
C) a cost-of-living index.
D) consumer surplus.

Question

Quizplus · Accepted Answer

Real income takes into account the changes in purchasing power due to inflation or deflation. Nominal income, on the other hand, does not account for changes in purchasing power. A cost-of-living index is a measure of how much it costs to maintain a certain standard of living in a particular geographic area. Consumer surplus is the difference between what a consumer is willing to pay for a good or service and what they actually pay for it.

The Amount of Money Received in a Particular Period Adjusted