Final answer:
The important consideration with each vocation is D. salary/hourly pay, as it directly affects one's financial situation. The impact of a 5% inflation rise varies: COLA contract holders are protected, cash savers lose value, fixed-rate lenders earn less real value, and workers without impending raises lose purchasing power. The CPI is best for adjusting paychecks for inflation.
Step-by-step explanation:
Among the important things to consider with each vocation is D. salary/hourly pay. This is because your compensation directly impacts your ability to manage your cost of living and save for the future. Other factors such as inflation can alter the value of the money you earn, but salary is the immediate figure that determines your income level.
When considering the impact of a 5% rise in inflation, different economic actors are affected in various ways:
- A union member with a COLA wage contract is typically protected because their wages increase with inflation.
- Someone with a large stash of cash in a safe deposit box would be hurt as the value of that cash decreases.
- A bank lending money at a fixed rate of interest could be hurt because the real value of the repayments they receive falls.
- A person who isn't due to receive a pay raise for another 11 months is also hurt as inflation erodes the purchasing power of their wages.
To adjust your paycheck for inflation, the Consumer Price Index (CPI) would be the most appropriate as it measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.