If Your Wages Are Indexed So That They Automatically Adjust

question 62

Multiple Choice

If your wages are indexed so that they automatically adjust for inflation, in a period of continued high inflation, the cost of the goods and services you buy ____ and your nominal income ____.

• A)​decreases, decreases
• B)​increases, increases
• C)​decreases, remains the same
• D)​increases, remains the same

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Definitions:

Drive-Reduction

A motivational concept suggesting that humans act to alleviate physical or psychological needs, aiming at maintaining homeostasis.

Safety

The state of being safeguarded against or not prone to causing harm, peril, or damage.

Esteem

A regard for oneself with respect or admiration, often seen as a component of self-worth or self-respect.

Belongingness And Love

A fundamental human need to be an accepted member of a group and to form meaningful attachments with others.