Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

Over the course of a year, two changes took place in a company. 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’ real income fell; office workers’ real income fell
  • Bcompany directors’ real income fell; office workers’ real income rose
  • Ccompany directors’ real income rose; office workers’ real income fell
  • Dcompany directors’ real income rose; office workers’ real income rose

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