Social Sciences and History / Unit 14 SSH 1326 short lesson, about 20 seconds
Indexing: COLAs, ARMs, Brackets
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The idea
A payment is indexed if it is adjusted automatically for inflation. Private examples: wage contracts with cost-of-living adjustments, and adjustable-rate mortgages, whose interest rate moves with market rates. Public examples: tax brackets and Social Security payments.
In practice
A bracket that moves so a raise is not a tax increase.
Where people slip
Indexing follows inflation; it does not prevent it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
- Nothing yet depends on this.
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