ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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how much money you actually earn.
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your income minus your taxes.
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how much your income can buy.
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your income minus taxes and benefits.
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Detailed explanation-1: -Real income, also known as real wage, is how much money an individual or entity makes after adjusting for inflation. Real income differs from nominal income, which has no such adjustments. Individuals often closely track their nominal vs. real income to have the best understanding of their purchasing power.
Detailed explanation-2: -The most commonly published and discussed real income measure is real GDP. Real GDP is a measure of the real income that an economy generates through production in terms of the goods and services produced.
Detailed explanation-3: -Real income indicates earnings that an entity or an individual makes after considering inflation rates. It is also known as real wage when denoting the inflation-adjusted earnings of an individual. Nominal income represents earnings that are not adjusted with subsequent changes in inflation rates.
Detailed explanation-4: -Real income refers to the income an individual or group receives after an adjustment is applied for inflation (a sustained increase in the price levels of goods and service). Money income is simply a person’s income in money or rather the dollar amount of a person’s income.
Detailed explanation-5: -Real Income = Wages-(Wages x Inflation Rate) Real Income = Wages / (1 + Inflation Rate)