In 1996 the price level was 148, and Bob's nominal income was $29,600. In 1997, the price level was 152. If Bob's real income didn't change, his nominal income in 1997 would have to be:
A. $19,474
B. $20,000
C. $30,400
D. $31,650
E. $32,895

Question

In 1996 the price level was 148, and Bob's nominal income was $29,600. In 1997, the price level was 152. If Bob's real income didn't change, his nominal income in 1997 would have to be:
A.	$19,474
B.	$20,000
C.	$30,400
D.	$31,650
E.	$32,895

minimato · Answer

I think the answer is C. $30,400

minimato · Answer

1996 real income: 
(29,600)/1.48 = $20,000 

Knowing that the real income stays the same, the nominal income for the next year would be: 
(20,000)(1.52) = $30,400

Is this right?