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Economics · May / June 2021 · Paper 11 · Question 23

2281Inflation

In a year, two changes occurred in a company. Company directors' salaries increased by 15%. Office workers' wages increased by 5%. The rate of inflation was 3.4%. What happened to real income?

  1. Acompany directors' real income: fell; office workers' real income: fell
  2. Bcompany directors' real income: fell; office workers' real income: rose
  3. Ccompany directors' real income: rose; office workers' real income: fell
  4. Dcompany directors' real income: rose; office workers' real income: rose

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Correct answer: D. company directors' real income: rose; office workers' real income: rose

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