The price of a gallon of gasoline at the pump increased by 10 percent at the same time that the inflation rate was 5 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 nominal price of gasoline increased by 10 percent. The real price, which accounts for inflation, also increased because the increase in the nominal price (10%) was greater than the inflation rate (5%).

The Price of a Gallon of Gasoline at the Pump