Union contracts with built-in cost-of-living adjustments and home mortgages that vary with the rate of inflation are:
A) inappropriate ways of combating inflation.
B) examples of bracket creep.
C) means of implementing fiscal policy.
D) steps that can be taken to decrease the adverse impacts of inflation.
E) examples of failed discarded policies of the 1970s.

Question

Quizplus · Accepted Answer

Union contracts with built-in cost-of-living adjustments and home mortgages that vary with the rate of inflation help to decrease the adverse impacts of inflation. They help to maintain the purchasing power of workers' salaries and keep up with the rising cost of living, making it easier for them to afford daily necessities. Similarly, mortgages that adjust with inflation help homeowners manage their payments as the value of the dollar fluctuates. These measures do not necessarily combat inflation but rather mitigate its effects on individuals and households.

Union Contracts with Built-In Cost-Of-Living Adjustments and Home Mortgages That