Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

During a one-year period, two adjustments were made in a company. The salaries of company directors rose by $15\%$. The wages of office workers increased 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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