Real income reflects the purchasing power of money, which means it takes into account inflation and adjusts for changes in prices. Real income determines how much goods and services one can purchase with their income. It is not adjusted for unemployment or stability of the labor force.

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Real Income

Question 82

Multiple Choice

Real income:

A) Is income adjusted for unemployment.
B) Is income without any adjustment.
C) Reflects the purchasing power of money.
D) Reflects the stability of the labor force.

Correct Answer: