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Given nominal income to be Rs 375 and price index 125, calculate real income. - Economics

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Given nominal income to be Rs 375 and price index 125, calculate real income.

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Solution

`"Real Income"="Nominal Income"/"Price Index of Current Year"xx"Price Index of Base Year"`

Consider Price Index of base year as 100

`"Real Income"=375/125xx100`

= Rs 300

Concept: Real and Nominal GDP
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