Credit Analyst Interview Question:

Do you know what is 'Real Income'?

Submitted by: Muhammad

Real income refers to the income of an individual or group after taking into consideration the effects of inflation on purchasing power. For example, if you receive a 2% salary increase over the previous year and inflation for the year is 1%, then your real income only increases by 1%. Conversely, if you receive a 2% raise in salary and inflation is at 3%, then your real income shrinks by 1%.
Submitted by: Muhammad