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Norma Receives an Increase in Her Nominal Income

Question 18

Multiple Choice

Norma receives an increase in her nominal income.She complains that the current inflation rate of six percent erodes the real purchasing power of her additional nominal income.This is true


A) only if the increase in her nominal income is less than six percent.
B) only if the increase in her nominal income is more than six percent.
C) since inflation always reduces purchasing power.
D) only if her real income increases.

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