To Ensure That Your Salary Maintains Its Real Purchasing Power

question 47

Multiple Choice

To ensure that your salary maintains its real purchasing power from year to year, your nominal salary must be:

• A)deflated.
• B)indexed.
• C)aggregated.
• D)hyperinflated.

---

Definitions:

Depreciation Expense

Systematically dividing the cost of a tangible asset over its estimated useful life.

Impairment Losses

Monetary losses identified when the book value of an asset is higher than its salvageable value.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties.