If the Inflation Rate Is 5 Percent and You Receive

Multiple Choice

If the inflation rate is 5 percent and you receive a wage increase of 5 percent,

A) your nominal income declines but your real income increases
B) both your nominal income and your real income increase by 5 percent
C) your nominal income increases but your real income declines
D) both your nominal income and your real income decrease by 5 percent
E) your nominal income increases by 5 percent but your real income is unchanged