The price of a gallon of gasoline at the pump increased by 5 percent at the same time that the inflation rate was also 5 percent. The nominal price of gasoline ________, and the real price of gasoline ________.
A)did not change; increased
B)did not change; did not change
C)increased; did not change
D)increased; decreased

Question

Quizplus · Accepted Answer

The price of gasoline at the pump increased at the same rate as the general price level, thus while the nominal price increased, the real price was unchanged.

The Price of a Gallon of Gasoline at the Pump