Answer:
Both Sabrina's nominal and real income increased
Explanation:
Her nominal income during 2017 was $100,000 and it increased to $105,000 during 2018, a $5,000 increase.
Sabrina's real income during 2017 was $100,000 (using 2017 as the base year), and her real income during 2018 was = $105,000 / 1.02 = $102,941. That means that her real income increased by $2,941
Nominal income is the income that represents the affordability of the individual to avail of the goods and services in the given income.
The real income is the income of the individual or the nation that is estimated after the adjustment of all the inflations of the economy.
The correct option is Both Sabrina's nominal and real income increase.
Her nominal income during 2017 was $100,000 and it increased to $105,000 during 2018,a $5,000 increase.
Sabrina's real income during 2017 was $100,000 (using 2017 as the base year), and her real income during 2018 was = [tex]\frac{\$105,000}{1.02 }[/tex]= $102,941. That means that her real income increased by $2,941.
To know more about the nominal income and the real income, refer to the link below:
https://brainly.com/question/15239854
