If your income rises at 4 percent and inflation has risen at 3 percent, then the purchasing power of your income has

Question

Quizplus · Accepted Answer

When your income rises at 4 percent and inflation has risen at 3 percent, your income has increased in nominal terms. However, your purchasing power has also increased because your income has outpaced inflation. This means that you can buy more goods and services with the same amount of money than you could previously, leading to an increase in purchasing power.

If Your Income Rises at 4 Percent and Inflation Has