1. Your friend is very happy because his real wage has increased unexpectedly. Explain, using the concepts of real income, and nominal income, anticipated and unanticipated inflation rate, how is this possible. 2 Marks
2. Assume a newspaper article stated, "The rise in the consumer price index of 2.2 percent has increased the cost of living of an average Australian by 2.2 percent". Is this an accurate conclusion? Explain. 2 Marks