Because the CPI Overstates Inflation

question 203

Multiple Choice

Because the CPI overstates inflation,

• A)when wages are linked to the CPI,workers' wages become too low as time passes.
• B)as time passes,government payments are increasingly lower than intended.
• C)as time passes,government outlays are increased by more than necessary to compensate for inflation.
• D)workers do not receive adequate compensation for price changes.
• E)most contracts use the GDP deflator to measure inflation.

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