Wage Indexation

question 48

Multiple Choice

Wage indexation

• A)increases nominal wages periodically in accordance with the increase in prices over a given time period
• B)helps the economy adjust more rapidly back to the natural unemployment rate after a supply shock
• C)is a method of preventing inflation by taxing away what workers may have gained from unanticipated inflation
• D)provides protection against purchasing power loss for over half of the U.S. work force
• E)is most prevalent n countries with a history of low inflation rates

---

Definitions:

Gray Market Activity

Trading of goods through distribution channels that, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.

Global Pricing

The strategy of setting prices for products or services on a global scale, taking into account currency differences, economic conditions, and local market demand.

Market Activity

The volume of transactions or trades and the behavior of participants in financial markets, reflecting the degree of vibrancy or fluctuations.

Skimming

A pricing strategy where a company sets a high price for a product and sells to the segment that is willing to pay a premium.