Household Spending in Real Terms

Steps:

• Review figures showing nominal and real household expenditures for 2008–2010.
• Identify real terms data, which adjusts nominal values for inflation using a price index.
• Compare real spending levels across all households from 2008 to 2010.
• Confirm consistent increase in real terms for every household.

Why D is correct:

• Real terms expenditure, defined as nominal spending deflated by the consumer price index (CPI), reveals true purchasing power gains, indicating all households bought more goods and services after inflation adjustment.

Why the others are wrong:

• A: Figures likely show nominal spending, which could decrease despite real gains due to inflation.
• B: Living standards depend on real income, not just spending; 2009 data may not confirm lower standards for all.
• C: Inflation rates require year-over-year price change calculations, not directly provided in spending figures.

Final answer: D