If your nominal income in 2002 was $50,000,and prices doubled between 2002 and 2008,to have the same real income,your nominal income in 2008 must be

Question

Quizplus · Accepted Answer

If prices doubled from 2002 to 2008, it means the inflation rate is 100%. Therefore, we need to double the nominal income of 2002 to have the same purchasing power in 2008. 
($50,000 x 2) = $100,000, which is option D.

If Your Nominal Income in 2002 Was $50,000,and Prices Doubled