Which of the Following Would Be a Consequence of Substitution

question 73

Multiple Choice

Which of the following would be a consequence of substitution bias in the CPI?

• A)Social Security payments would not adequately compensate retired workers for inflation.
• B)Businesses would overcompensate employees for inflation when giving cost of living raises.
• C)The inflation rate based on the CPI would underestimate the true level of inflation.
• D)Judges would award child support payments that would not adequately keep up with the true cost of inflation.