Social Security Payments Are Indexed for Inflation Using the CPI

question 41

Multiple Choice

Social Security payments are indexed for inflation using the CPI. A recent newspaper editorial claimed that Social Security recipients are harmed by years of low inflation because they do not receive as large an increase in their payments as they do in years of high inflation. Which of the following statements is correct?

• A)The newspaper editorial is correct under all circumstances.
• B)The newspaper editorial is correct if the market basket consumed by Social Security recipients is the same as the market basket used to compute the CPI.
• C)The newspaper editorial could be correct if the prices of the goods consumed by Social Security recipients change at a different rate than the prices of the goods in the market basket used to compute the CPI
• D)The newspaper editorial is incorrect under all circumstances.

---

Definitions:

Regurgitation

The backward flow of blood through a valve in the heart due to the valve not closing properly, or the process of vomiting undigested food.

Cardiac Muscle Tissue

Tissue composed of cells that form the myocardium of the heart, responsible for the rhythmic contractions that pump blood.

Myocardium

The thick, muscular middle layer of the heart wall, composed of cardiac muscle cells that contract to pump blood through the circulatory system.

Chordae Tendineae

Heart strings, or thin bands of fibrous tissue, that attach to the heart valves and are responsible for preventing the inversion of these valves during heart contraction.