North Carolina Funeral Law Practice Exam

An inflation-proof contract establishes a/an ____ price for funeral services and merchandise.

1. Variable

2. Dynamic

3. Fixed

4. Estimated

The correct answer is: Fixed

An inflation-proof contract is designed to set a stable and unchanged price for funeral services and merchandise, protecting both the service provider and the consumer from the effects of inflation. By establishing a fixed price, the contract ensures that the agreed-upon amount will remain the same regardless of any future price increases that may occur in the funeral industry due to inflation. This provides peace of mind for families, knowing that they can plan financially without worrying about market fluctuations impacting their costs when they need to make funeral arrangements. In contrast, the other options like variable, dynamic, and estimated imply change or uncertainty in pricing, which contradicts the purpose of an inflation-proof contract. A variable price can fluctuate based on market conditions, while a dynamic price might change based on various factors, and an estimated price lacks the certainty and guarantee that a fixed price provides. Thus, the correct answer of fixed accurately conveys the nature of an inflation-proof contract.