Why would workers and retirees want to have their wages and benefits indexed to the Consumer Price Index (CPI)?
A) To lower their purchasing power during years of rising prices
B) To maintain their purchasing power during years of rising output
C) To maintain their purchasing power during years of declining output
D) To increase their purchasing power during years of negative inflation
E) To maintain their purchasing power during years of rising prices

Question

Quizplus · Accepted Answer

Indexing wages and benefits to the CPI ensures that workers and retirees can maintain their purchasing power during years of rising prices. This means that as the cost of living increases, their incomes will also increase to keep up with the inflation rate, allowing them to afford the same goods and services as before.

Why Would Workers and Retirees Want to Have Their Wages