The intent of indexing is to:
A)reduce inflation gradually.
B)shift the long-run Phillips curve to the right.
C)take most of the sting out of inflation.
D)raise tax revenue automatically during inflation.

Question

The intent of indexing is to:
A)​reduce inflation gradually.
B)​shift the long-run Phillips curve to the right.
C)​take most of the sting out of inflation.
D)​raise tax revenue automatically during inflation.

Quizplus · Accepted Answer

Indexing is a method to adjust prices or wages automatically in response to changes in inflation. Therefore, its intent is to mitigate the impact of inflation by reducing its effect on real incomes and savings, which takes most of the sting out of inflation. It does not aim to reduce inflation, shift the long-run Phillips curve, or raise tax revenue automatically.

The Intent of Indexing Is To