Question

Differentiate between money income and real income. Give one example of each.

Answer 1

Answer:

This is because of increase in the price of commodity due to which the real income decreased. Therefore, real income is the purchasing power whereas money income is the income that you recieve in monetary form.

Answer 2

Answer:

Real income is nominal income adjusted for inflation. Real income is the buying power of your nominal income. If prices go up, nominal income (dollar income) being the same, real income goes down. If prices go down, nominal income (dollar income) being the same, real income goes up.

Explanation:

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