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.

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