# If Nominal Income is Rs 500 and Price Index is 125, Calculate Real Income. - Economics

If nominal income is Rs 500 and price index is 125, calculate real income.

#### Solution

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

Consider that Price Index of base year as 100

"Real Income"=500/125xx100

= Rs 400

Concept: Real and Nominal GDP
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