A worker would be hurt least by inflation when the:
A) worker anticipates inflation and increases savings at the bank.
B) worker is protected by a cost-of-living adjustment clause in an employment contract.
C) price level increases but at a decreasing rate.
D) worker is protected by fixed annual increases in wages and benefits in an employment contract.

Question

Quizplus · Accepted Answer

When a worker is protected by a cost-of-living adjustment clause in an employment contract, their wages will increase in proportion to the inflation rate, ensuring their purchasing power does not decrease. This protects them from the negative effects of inflation. The other options may provide some level of protection but not to the same degree as a cost-of-living adjustment clause.

A Worker Would Be Hurt Least by Inflation When The