If the rate of increase in the dollar value of your net worth equals the rate of inflation,then your
A)real net worth is unchanged.
B)real income is unchanged.
C)nominal net worth is unchanged.
D)nominal income is unchanged.

Question

Quizplus · Accepted Answer

If the rate of increase in the dollar value of your net worth equals the rate of inflation, then your nominal net worth (which is the dollar value of your assets minus the dollar value of your liabilities) increases at the same rate as inflation, but your real net worth (which is the purchasing power of your assets minus the purchasing power of your liabilities) remains unchanged. This means that your net worth has not grown in real terms, despite the fact that it may have increased in nominal terms. Therefore, choice A is the correct answer.

If the Rate of Increase in the Dollar Value of Your