Which of the following will tend to occur as a result of a reduction in the proportion of a country's workers who have indexed wages?

Question

Quizplus · Accepted Answer

When a smaller proportion of a country's workers have indexed wages, wages are less likely to automatically adjust with inflation. This means that inflation can change without necessitating a corresponding change in wages, leading to a situation where a change in unemployment can have a relatively smaller impact on inflation, as wage adjustments do not automatically follow changes in the price level. This is related to the concept of wage rigidity and its impact on the inflation-unemployment relationship, often discussed in the context of the Phillips curve.

Which of the Following Will Tend to Occur as a Result