Answer
Real income growth: $1.5\%$
Inflation rate: $1.7\%$
Work Step by Step
We have:
Real Income Growth ≈ Nominal Income Growth − Inflation Rate
1. Real Income Increase
Nominal income growth: 5.3%
Inflation (price level increase): 3.8%
Real income growth:
5.3%−3.8%=1.5%
Your real income increased by approximately 1.5%.
2. Inflation Rate
Nominal income growth: 2.8%
Real income growth: 1.1%
Inflation rate:
2.8%−1.1%=1.7%
The approximate inflation rate was 1.7%.
