In an inflationary economy like ours to–day, which of the following components of wages becomes more…
In an inflationary economy, rising prices erode the purchasing power (real wage) of workers' nominal pay. Dearness Allowance (DA), which is indexed to the Consumer Price…
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In an inflationary economy like ours to–day, which of the following components of wages becomes more important :
Answer and explanation
Correct answer D
In an inflationary economy, rising prices erode the purchasing power (real wage) of workers' nominal pay. Dearness Allowance (DA), which is indexed to the Consumer Price Index (CPI), becomes the most crucial wage component because it neutralises inflation and protects workers' standard of living.
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UGC NET HRM / Labour Welfare and Industrial Relations