A college graduate in 1972 found a job paying $7,200. The CPI was 0.418 in 1972. A college graduate in 2005 found a job paying $30,000. The CPI was 1.68 in 2005. The 1972 graduate's job paid in nominal terms and in real terms than the 2005 graduate's job.A. more; lessB. more; moreC. less; moreD. less, less

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andromache andromache · Answer 1 · 2019-09-05T10:25:39+02:00

Answer:

The correct option is C. less; more

Explanation:

Real terms: In real terms, it measured the value in terms of goods and services. Like : GDP, CPI, etc

whereas,

In nominal terms, the value is measured in terms of money that means money transaction is involved in the transaction.

So,

In 1972, the nominal term is less as the job value of 1972 is less than the job value of 2005 by $22,800 ( $30,000 - $7,200)

And, in 2005, the real term is more as the CPI index of 2005 is more than the CPI index of 1972 by 1.262 (1.68 - 0.418)

Hence, the correct option is C. less; more