Real income is computed by ________.
A)dividing money income by the CPI and multiplying by 100
B)dividing the CPI by money income and multiplying by 100
C)multiplying money income by the CPI
D)subtracting the CPI from money income

Question

Quizplus · Accepted Answer

Real income is computed by adjusting the nominal or money income for inflation to reflect the actual purchasing power. This is done by dividing the money income by the Consumer Price Index (CPI) and then multiplying by 100.

Real Income Is Computed by ________