Nancy's union has negotiated a three-year wage contract that provides for a 2.4% increase indexed to inflation. The rates of inflation are forecast to be 1.62%, 1.93% and 2.21% respectively Nancy's wage increase be expressed in the new contract as -COLA plus 2.4%
Explanation:
From the question it is clear that the rate of inflation is forecasted to be either 1.62%,1.93% or 2.21% in the near future
But As per the wage contract of the Nancy's union the increase in inflation is assumed to be 2.4%
So,the Nancy's wage increase in the new contract will be expressed as -COLA plus 2.4%
(The term COLA refers to the cost of living adjustment)
Wage increase =cost of living adjustment(COLA)+increased inflation
