A teacher's salary increased from \$50,000 to \$55,000, while the CPI rose from 1.00 to 1.15. How did the change in price level affect their real income?

• A. The increase in price level had no effect on real income.
• B. The increase in price level doubled the real income.
• C. The increase in price level offset the salary increase, reducing real income.
• D. The increase in price level enhanced the salary increase, increasing real income.

Answer: (C)