If the CPI Is Used as a Cost of Living

question 271

Multiple Choice

If the CPI is used as a cost of living index,incomes that are adjusted to reflect the changes in the CPI will

• A)increase by more than the actual change in the cost of living.
• B)decrease by more than the actual change in the cost of living.
• C)increase by more than the actual change in quantities.
• D)decrease by more than the actual change in quantities.
• E)generally rise by about 2 percent a year because the standard of living generally rises by about 2 percent a year.

---

Definitions:

Normally Distributed

A data distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Sampling Distribution

A probability distribution of a statistic obtained through a large number of samples drawn from a specific population.

Bell Shaped

Describes a distribution that is symmetrical and peaked in the middle, resembling the shape of a bell, often referring to the normal distribution.

Sampling Distribution

Likelihood patterns of a specific statistic that are based on randomly chosen samples.