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

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Definitions:

Disruptive Behavior Patterns

Actions or sequences of actions that interrupt the normal flow or functioning of a social or operational system.

Significant Behavior Patterns

Regularly occurring actions or reactions that have importance in predicting or understanding an individual's behavior.

Obsessions

Persistent, unwanted thoughts, images, or impulses that cause significant distress or anxiety.

Delusions

Strongly held false beliefs or judgments, which are resistant to reason or confrontation with actual fact, often occurring as a symptom of psychiatric disorders.