What was the absolute amount of increase in real income? -, Ask an Expert

Economics

Assume that nominal income is $35,000 and the price index is 1.20 in year 1. In year 2, nominal income rises to $38,000 and the price index rises to 1.25. What was the percentage change in real income from year 1 to year 2? What was the absolute amount of increase in real income? - Make your calculations of the percentage change in real income and the absolute change in real income using the approximation formula and using the more precise method with index numbers.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9438954

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