An employee receives a 4% annual salary increase. During the same year, the average price of goods and services that the employee buys increases by 6%. Which of the following statements accurately describes the change in the employee's ability to purchase goods and services?

Analyzing Real Income Changes

Evaluating a Financial Decision

If a worker receives a 5% raise in their yearly salary, and the average price of goods and services increases by 3% during that same year, then the worker's ability to purchase goods and services has declined.