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    Macroeconomic impact on income

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    Last year the Olsen family earned $70,000. This year their income is $77,000. In an economy with an inflation rate of 8%, we can conclude the Olsen's nominal income:
    a. and real income both increased
    b. and real income by decreased
    c. increased, but their real income decreased
    d. decreased, but their real income increased
    e. none of the above.

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    Real income is the income of an individual after adjusting for ...

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    The solution discusses the macroeconomic impact on income.