Economics (AS & A Level) · May / June 2022 · Paper 13 · Question 23
9708Price stability
A household’s income increased by 3%. Over the same period, the rate of inflation was also 3%. Which statement is correct?
- ABoth the nominal income of the household and the real income of the household increased by 3%.
- BThe nominal income of the household remained unchanged while the real income of the household increased by 3%.
- CThe nominal income of the household increased by 3% while the real income of the household remained unchanged.
- DThe nominal income of the household increased by 3% while the real income of the household increased by 6%.
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Correct answer: C. The nominal income of the household increased by 3% while the real income of the household remained unchanged.
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