Answer the Question.

1. Two candidates for governor of a state differ in their accounts of the state's economy during the incumbent's term. The incumbent claims that during his four-year term the economy has improved, citing a rise in the median household income from

$ 33,000

to

$ 34,500.

The challenger claims that the economy has declined, citing that the buying power of families in the state has declined during the four years. Which of the following best explains how both candidates can be right?

A.

It is not possible for both candidates to be right; one of them is obviously lying.

B.

Though the median household income increased, prices increased by a greater percent, meaning that in real terms the median income actually decreased.

C.

The incumbent is referring to the state economy, while the challenger is referring to the national economy.

D.

Only those in the middle income group saw their incomes rise, those with lower and higher incomes actually saw their incomes decline during the incumbent's term.