Which of the Following Would Be Considered a Resource Cost

question 51

Multiple Choice

Which of the following would be considered a resource cost of inflation?

• A) A cost of living adjustment
• B) Loss of purchasing power
• C) Additional trips to the bank
• D) Adjusting nominal interest rate to get real rates
• E) Creeping inflation

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Definitions:

Defined Benefit Plan

A pension plan where an employer promises a specified pension payment upon retirement, calculated based on the employee's earnings history, tenure of service, and age.

Retirement Accounts

Financial accounts that offer tax benefits and are specifically designed to save and invest for retirement.

Lump Sum Amount

A single payment made for a particular purpose, rather than payments made in installments.

Employee Retirement Income Security Act

A federal law that sets minimum standards to ensure that voluntary, private industry pension and health plans are established and maintained in a fair and financially sound manner.