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Suppose That a Person's Nominal Income Rises by 5 Percent

Question 284

Multiple Choice

Suppose that a person's nominal income rises by 5 percent and the price level rises from 125 to 130. The person's real income will


A) fall by about 1 percent.
B) remain constant.
C) rise by about 4 percent.
D) rise by about 1 percent.

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