In 2012 Ortega's nominal income rose by 8 percent and the price level rose by 5 percent.We can conclude that Ortega's real income:

Question

Quizplus · Accepted Answer

Real income is calculated by adjusting nominal income for inflation. To do so, we use the formula: Real income = (Nominal income / Price level) x 100. 
Using this formula, we can calculate Ortega's real income in 2012 as follows: 
Real income = (8 / 1.05) x 100 
Real income = 7.62 percent 
Therefore, Ortega's real income rose by 3 percent (7.62 - 4.62 = 3).

In 2012 Ortega's Nominal Income Rose by 8 Percent and the Price