contestada

A worker would be hurt least by inflation when the____________.
a. worker anticipates inflation and increases savings at the bankb. worker is protected by a cost-of-living adjustment clause in an employment contractc. the price level increases but at a decreasing rated. worker is protected by fixed annual increases in wages and benefits it an employment contracte. government increases the level of social security retirement benefits to correct for the effects of unanticipated inflation

Respuesta :

Answer:

The correct answer is option b.

Explanation:

Inflation can be defined as a sustained increase in the general price level. Inflation causes the purchasing power of money to erode. The value of cash balances gets reduced.

This causes the real income of workers to get reduced as well. However, a worker will not be harmed by inflation if his/her employment contract includes a cost of living adjustment clause.

This clause will cause the payments made to the workers to increase if there is an increase in the cost of living index.

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