Final answer:
Variable contract payments to the issuer involving wholesale transactions are agreements that allow for the adjustment of prices according to inflation. These contracts benefit both sellers and buyers by protecting them from the risks associated with inflation.
Step-by-step explanation:
Variable contract payments to the issuer involving wholesale transactions are agreements that allow for the adjustment of prices according to inflation. These contracts are beneficial for both sellers and buyers. Sellers are not locked into a low price if inflation exceeds expectations, while buyers are not locked into a high price if inflation is lower than anticipated.
For example, if a seller signs a variable contract with a buyer, and inflation increases beyond expectations, the contract price will automatically increase to reflect the inflation rate. On the other hand, if inflation is lower than anticipated, the contract price will decrease accordingly. This ensures that both parties are protected from the risks associated with inflation.