If Inflation Is Estimated by an Index Like the Consumer

question 129

Multiple Choice

If inflation is estimated by an index like the consumer price index (CPI) to be higher than it actually is,who is liable to be hurt by the error?

• A) corporations that adjust worker salaries to keep pace with inflation
• B) workers whose negotiated union wages include an inflation adjustment
• C) people whose Social Security incomes are adjusted for inflation
• D) consumers who pay a fixed percentage of purchases as sales tax
• E) entrepreneurs who borrow from banks at a fixed rate of interest

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Definitions:

Part-time Jobs

Employment positions that require working hours fewer than a full-time schedule, often offering flexibility but fewer benefits.

Underage Party

A social gathering involving individuals who are below the legal age for certain activities, often including the consumption of alcohol.

Police Officer

A member of a police force or law enforcement agency tasked with enforcing laws, maintaining public order, and protecting citizens and their property.

Indifferent

Describes a state or attitude of having no particular interest or sympathy; being unconcerned or unresponsive toward something.