The Bias in the CPI Distorts Private Contracts Because

question 95

Multiple Choice

The bias in the CPI distorts private contracts because

• A)a lender that links the interest payments on the loan to the CPI is likely to be worse off than a lender that does not link the interest payments on the loan to the CPI.
• B)a future payment that is linked to the CPI is likely to be raised above the true increase in the price level.
• C)the CPI cannot properly account for what goods and services a typical urban consumer buys.
• D)a worker that links her salary to the CPI is likely to be worse off than a worker that doesn't link her salary to the CPI.
• E)a future increase in a payment that is linked to the CPI is likely to be less than the true increase in the price level.

---

Definitions:

Management

The process of dealing with or controlling things or people, often within an organizational setting, including planning, organizing, leading, and controlling.

Benevolence

The desire to do good to others; goodwill; charitableness.

Immediate Supervisor

The direct manager or authority over an employee, responsible for overseeing their work and providing guidance.

Implicit Personality Theory

The assumptions and beliefs individuals hold about how personality traits are related and how these perceptions influence their judgments of others.