If your real income falls during a period of inflation,then your nominal income might have

Question

Quizplus · Accepted Answer

If real income falls during a period of inflation, it is because the increase in prices (price level) is higher than the increase in nominal income. Therefore, nominal income increases, but not enough to offset the increase in prices, resulting in a decrease in real income. This implies that nominal income increased more slowly than the price level, making option C the correct choice.

If Your Real Income Falls During a Period of Inflation,then