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Show how much changes in real income (or Real GDP) for each following cases. % (increase, A. Nominal income falls by 2 percent, and the price level falls by 10 percent. decrease) % (increase, B. Nominal income rises by 8 percent, and the price level rises by 4 percent. decrease) % (increase, C. Nominal income rises by 12 percent, and the price level rises by 15 percent. E decrease)

Show how much changes in real income (or Real GDP) for each following cases. % (increase, A. Nominal income falls by 2 percent, and the price level falls by 10 percent. decrease) % (increase, B. Nominal income rises by 8 percent, and the price level rises by 4 percent. decrease) % (increase, C. Nominal income rises by 12 percent, and the price level rises by 15 percent. E decrease)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Title: Understanding Changes in Real Income** **Instructions: Calculate the Changes in Real Income (or Real GDP) for Each Case Below.** **A.** Nominal income falls by 2 percent, and the price level falls by 10 percent. → _______% (increase, decrease) **B.** Nominal income rises by 8 percent, and the price level rises by 4 percent. → _______% (increase, decrease) **C.** Nominal income rises by 12 percent, and the price level rises by 15 percent. → _______% (increase, decrease) **D.** Nominal income falls by 4 percent, and the price level rises by 6 percent. → _______% (increase, decrease) **Question: Which Case Provides the Greatest Increase in Real Income?** (A, B, C, D) → Circle the Correct Answer! --- **Additional Task: Identify Who Would be Hurt by Inflation** In this exercise, indicate (circle or highlight) who would be adversely affected by inflation from the categories below: - Fixed income receiver - Debtor (Borrower) - Creditor (Lender) - Savers - Flexible-income receivers
Transcribed Image Text:**Title: Understanding Changes in Real Income** **Instructions: Calculate the Changes in Real Income (or Real GDP) for Each Case Below.** **A.** Nominal income falls by 2 percent, and the price level falls by 10 percent. → _______% (increase, decrease) **B.** Nominal income rises by 8 percent, and the price level rises by 4 percent. → _______% (increase, decrease) **C.** Nominal income rises by 12 percent, and the price level rises by 15 percent. → _______% (increase, decrease) **D.** Nominal income falls by 4 percent, and the price level rises by 6 percent. → _______% (increase, decrease) **Question: Which Case Provides the Greatest Increase in Real Income?** (A, B, C, D) → Circle the Correct Answer! --- **Additional Task: Identify Who Would be Hurt by Inflation** In this exercise, indicate (circle or highlight) who would be adversely affected by inflation from the categories below: - Fixed income receiver - Debtor (Borrower) - Creditor (Lender) - Savers - Flexible-income receivers
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