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Suppose Your Nominal Income This Year Is 5 Per Cent

Question 17

Multiple Choice

Suppose your nominal income this year is 5 per cent higher than last year. If the inflation rate for the period was 3 per cent, then your real income:


A) increased by 1.67 per cent.
B) increased by 2 per cent.
C) increased by 8 per cent.
D) declined by 0.6 per cent.

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