In order for a wage increase to actually improve the recipient's purchasing power and standard of living, it must
A)be larger than the increase in the CPI.
B)be regulated through an escalator clause.
C)be a cost of living adjustment.
D)be based on merit.

Question

Quizplus · Accepted Answer

A wage increase needs to be larger than the increase in the Consumer Price Index (CPI) to ensure that it actually enhances the recipient's purchasing power and standard of living. This is because the CPI measures changes in the price level of a basket of consumer goods and services, and if wages increase at a rate less than or equal to the CPI, the real purchasing power of those wages does not improve.

In Order for a Wage Increase to Actually Improve the Recipient's