multiple choice question\nindexing is the practice of\nincreasing a nominal quantity each period by the rate…

multiple choice question\nindexing is the practice of\nincreasing a nominal quantity each period by the rate of inflation.\nmultiplying a nominal quantity by a price index.\ndecreasing a nominal quantity each period by the rate of inflation.\ndividing a nominal quantity by a price index.

multiple choice question\nindexing is the practice of\nincreasing a nominal quantity each period by the rate of inflation.\nmultiplying a nominal quantity by a price index.\ndecreasing a nominal quantity each period by the rate of inflation.\ndividing a nominal quantity by a price index.

Answer

Brief Explanations:

Indexing is adjusting a nominal quantity for inflation. It involves increasing a nominal quantity each period by the rate of inflation to maintain its real - value. Multiplying by a price index is not the correct definition. Decreasing by the inflation rate is incorrect as well. Dividing by a price index is used to convert nominal to real values in a different context.

Answer:

increasing a nominal quantity each period by the rate of inflation.