Suppose That Canada's Official Consumer Price Index (CPI)inflation Rate Contains

question 114

Multiple Choice

Suppose that Canada's official consumer price index (CPI) inflation rate contains a measurement error in that it overstates the true cost of living increases of Canadians by 1% per year.This would mean that,during a year in which the CPI inflation rate is 3%,all senior citizens whose federal pensions are indexed to the CPI inflation rate would experience a ________ in their nominal incomes and a _________ in their real incomes.

• A) 4% increase;1% increase
• B) 3% increase;1% decrease
• C) 3% increase;1% increase
• D) 3% decrease;1% decrease
• E) 2% increase;1% increase

---

Definitions:

Antiembolic Stockings

Specialized hosiery designed to help prevent the occurrence of thromboembolism by applying pressure to lower legs, thereby improving blood flow.

Buck's Traction

A type of skin traction used in orthopedics to relieve muscle spasms and immobilize a limb by applying a pulling force.

Skin Integrity

The state of skin being whole, undamaged, and intact, important for protecting against infection and maintaining overall health.

Protein Intake

The amount of protein consumed in one's diet, important for muscle repair, growth, and overall health.