Nominal income per person in the United States in 1960 was about $2,800 per year, while in 1990 nominal income per person was about $21,000. This indicates that

Question

Quizplus · Accepted Answer

Nominal income refers to the amount of money earned without adjusting for inflation. Therefore, the fact that nominal income per person increased from $2,800 to $21,000 from 1960 to 1990 only tells us that there was an increase in income, but we cannot determine if this increase was due to inflation or economic growth or a combination of both. Option B is incorrect because nominal income alone does not indicate the standard of living as it does not account for inflation. Option C is partially correct but does not provide a complete explanation, as it only highlights the difference in the value of money between the two periods. Option D is entirely unrelated to nominal income and is thus incorrect.

Nominal Income Per Person in the United States in 1960