Last year the Harrison family earned $50,000. This year their income is $52,000. In an economy with an inflation rate of 5 percent, which of the following is correct?
a. The Harrison’s nominal income and real income have both risen.
b. The Harrison’s nominal income and real income have both fallen.
c. The Harrison’s nominal income has fallen, and their real income has risen.
d. The Harrison’s nominal income has risen, and their real income has fallen.