If Your Nominal Income Has Increased by 2 Per Cent

Multiple Choice

If your nominal income has increased by 2 per cent in one year, while the inflation rate for the same year is 3 per cent, you can conclude that your real income:

A) has increased by 1% approximately.
B) has decreased by 1% approximately.
C) has remained constant.
D) has either increased or decreased by 1%