Economics · National Income
Assertion (A): Real income is calculated at constant (base year) prices, while nominal income is calculated at current prices. Reason (R): Real income controls for changes in the price level and thus provides a better measure of changes in actual purchasing power and living standards over time. Choose the correct code:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false, R is true
- 2A is true, R is false
- 3Both A and R are true, but R is not the correct explanation of A
- 4Both A and R are true, and R is the correct explanation of A✓
Correct answer
Both A and R are true, and R is the correct explanation of A
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