Some Proponents of Entitlement-Program Reform Suggest Indexing Social Security Benefits

question 90

Multiple Choice

Some proponents of entitlement-program reform suggest indexing Social Security benefits to the consumer price index (CPI) :

• A) because beneficiary payments are not currently adjusted for cost of living increases.
• B) rather than to the producer price index, because CPI historically grows at a faster rate, which would mean benefit payments would grow at a faster rate.
• C) rather than to the producer price index, because CPI historically grows at a slower rate, which would mean benefit payments would grow at a slower rate.
• D) rather than to the average wage index, because CPI historically grows at a slower rate, which would mean benefit payments would grow at a slower rate.
• E) rather than to the average wage index, because CPI historically grows at a faster rate, which would mean benefit payments would grow at a faster rate.

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Definitions:

Standard Normal Variable

A random variable that has a mean of 0 and a standard deviation of 1, following the standard normal distribution.

Standard Normal Curve

The graphical representation of a normal distribution that has a mean of zero and a standard deviation of one, used in probability theory and statistics.

Z-score

A statistical measure representing the number of standard deviations a data point is from the mean.

Percentile

An indicator showing the value beneath which a certain percentage of data points in a collection of data lies.