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.
E) government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation.

Question

Quizplus · Accepted Answer

A cost-of-living adjustment (COLA) clause in an employment contract automatically adjusts wages based on changes in the cost of living (inflation), thus directly protecting the worker's purchasing power against inflation.

A Worker Would Be Hurt Least by Inflation When the _____