Ben's nominal annual income in 2009 was $40,000. If the rate of inflation is constant at 10 percent, in order to keep Ben's real income constant, his nominal income in the year 2010 should be:

nominal income in the year 2010 = $44000

Explanation:

given data

nominal annual income = $40,000

rate of inflation = 10 percent

solution

As here rate of inflation is 10 % that is

= 10% of $40,000

= 0.10 * $40,000

= $4000

so here his nominal income in the year 2010 will be

nominal income in the year 2010 = $40,000 + $4000

nominal income in the year 2010 = $44000