Real Income is…

August 20th, 2009

Real income is how much an individual, organization, or country can actually purchase or do with its earnings after taking inflation into account; that is, its purchasing power. In an environment where prices are increasing, even if you made the same amount of money, say $100, this year as you did last year, your real income was greater last year because you could buy more with that $100 last year than you can this year.

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