Wage Indexation

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