Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

The table indicates the proportion of a worker’s income that is spent on three categories of goods, together with the percentage increase in those goods’ prices over one year. During that same period, the worker’s money income increases by 25%. What is the effect on the worker’s real income?

  • AIt falls by 25%.
  • BIt falls by 50%.
  • CIt rises by 25%.
  • DIt is unchanged.

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