7 & 8

7. For a person to keep his real income steady at a certain level from one year to the next, his nominal income must A. rise if the price index falls. B. stay the same as the price index rises. C. fall if the price index rises. D. rise as fast as the price index. 8. A worker would be hurt least by inflation when the A. worker anticipates inflation and increases savings at the bank. B. worker is protected by a cost-of-living adjustment clause in an employment contract. C. worker is protected by fixed annual increases in wages and benefits in an employment contract. D. government increases the level of social security retirement benefits to correct for the effects of expected inflation