Suppose you get a 10 percent raise during a year in which the price level rises by 10 percent. Then over the year:
A. Your real income falls, but your nominal income remains unchanged.
B. Your real and nominal income both fall.
C. Your real and nominal income both rise.
D. Your real income remains unchanged, but your nominal income rises.
E. Your real income remains unchanged, but your nominal income falls
Ans: D. Your real income remains unchanged, but your nominal income rises.
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