Because a Third of Government Outlays Are Linked Directly to the CPI

question 32

Multiple Choice

Because a third of government outlays are linked directly to the CPI, as time passes the CPI bias
Means that the government's outlays are

• A)larger than needed to keep pace with the cost of living if the CPI is falling from one year to the next, otherwise the outlays are smaller than needed to keep pace with the cost of living.
• B)smaller than needed to keep pace with the cost of living if the CPI is falling from one year to the next, otherwise the outlays are larger than needed to keep pace with the cost of living.
• C)larger than needed to keep pace with the cost of living.
• D)smaller than needed to keep pace with the cost of living.
• E)exactly equal to the changes in the cost of living.

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