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If Real Income is Rs 400 and Price Index is 105, Calculate Nominal Income. - Economics

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If real income is Rs 400 and price index is 105, calculate nominal 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

`400="Nominal income"/105xx100`

`"Nominal income"=(400xx105)/100= 420 `Rs.

Concept: Concept of National Income
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