Balance of payments — practice question

A household’s income rose by 3%. During the same period, the inflation rate was also 3%. Which statement is correct?

• ABoth the nominal income of the household and the real income of the household increased by 3%.
• BThe nominal income of the household remained unchanged while the real income of the household increased by 3%.
• CThe nominal income of the household increased by 3% while the real income of the household remained unchanged.
• DThe nominal income of the household increased by 3% while the real income of the household increased by 6%.