If salary of worker increases from 50, 000 Naira to 80,000 Naira and average price

Explanation

This question is about the effect of a change in salary and average price of certain commodities on nominal income and real income. The question states that the salary of a worker has increased from 50,000 Naira to 80,000 Naira and the average price of certain commodities consumed by the worker has increased from 120 Naira to 160 Naira.

The question requires us to determine the effect of this change on the worker's nominal income and real income. Nominal income is the amount of money a person earns in absolute terms, while real income is the amount of goods and services that can be purchased with that money.

Option A suggests that the nominal income increases but leaves the real income constant. This means that the increase in salary is offset by the increase in the price of commodities, so the worker can buy the same amount of goods and services as before.

Option B suggests that the real income increases, but the nominal income has reduced. This means that the worker's purchasing power has increased as the increase in salary is greater than the increase in commodity prices, but the actual amount of money earned has decreased.

Option C suggests that the nominal income increases, but the real income decreases. This means that the increase in salary is outweighed by the increase in commodity prices, so the worker can buy fewer goods and services than before.

Option D is the correct answer. It suggests that both the nominal and real income increase. This means that the increase in salary is greater than the increase in commodity prices, so the worker can buy more goods and services than before.

In summary, when the salary of a worker increases from 50,000 Naira to 80,000 Naira and the average price of certain commodities consumed by the worker increases from 120 Naira to 160 Naira, the worker's nominal income and real income both increase.