Answer:
C. dividing nominal income by the price index (in hundredths).
Explanation:
Real income is simply the amount of money an individual has after adjusting for inflation. It is the buying power of the amount of money an individual has. It is also called real wage. It is calculated by dividing nominal income by price level.
That is,
Real income = Nominal income/Price level
Real income indicates the well being of an individual or entity better than nominal income as it gives the real measure of the amount of goods and services that can be purchased with the income.
