Real income can be determined by:
A. dividing the price level by nominal income.
B. deflating nominal income for inflation.
C. inflating nominal income for inflation.
D. dividing the annual rate of inflation by the number "70."
Answer: B
You might also like to view...
Refer to the scenario above. What is the purchasing power parity-based exchange rate between the two currencies?
A) 0.4 units of Country 1's currency for $1 B) 2.5 units of Country 1's currency for $1 C) 1.2 units of Country 1's currency for $1 D) 1 unit of Country 1's currency for $2.50
The limits of the terms of trade are determined by the:
a. distribution costs in each country. b. stock of foreign exchange in each country. c. average total costs of producing the commodities in each country. d. opportunity costs in each country. e. currency exchange rate between the trading partners.