Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

Within one year, a company experienced two changes. The salaries of the company directors rose by $15\%$. The wages of office workers rose by $5\%$. The inflation rate was $3.4\%$. What happened to real income?

  • Acompany directors fell, office workers fell
  • Bcompany directors fell, office workers rose
  • Ccompany directors rose, office workers fell
  • Dcompany directors rose, office workers rose

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