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.
C
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Refer to Figure 27-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
A) increase government spending B) contractionary fiscal policy C) increase taxes D) decrease interest rates
Beginning at the vertical axis intercept, as a consumer moves down the budget line, she will find that
a. the marginal utility per dollar spent on the vertical axis good decreases b. the marginal utility per dollar spent on the vertical axis good increases c. the marginal utility per dollar spent on the horizontal axis good increases d. the marginal utilities per dollar spent on both goods increase e. the marginal utilities per dollar spent on both goods remain constant along that particular budget line
A market which firms can enter if they choose and exit without losing money invested is
a. pure monopoly. b. duopoly. c. contestable. d. a market where there are kinked demand curves.
Changes in technology over time will result in
A) a more inelastic supply curve. B) a more elastic supply curve. C) a unitary elastic supply curve. D) no change in the elasticity of supply.