Related to the Economics in Practice on p. 453: The Consumer Price Index in the United States was 207.3 in 2007, 215.3 in 2008 and 214.5 in 2009. If a retiree's pension is tied to the CPI, her monthly pension check would have ________ from 2007 to 2008, and ________ from 2008 to 2009.
A) increased; increased
B) increased; decreased
C) decreased; increased
D) decreased; decreased

Question

Quizplus · Accepted Answer

The pension is tied to the CPI, which increased from 2007 to 2008 (from 207.3 to 215.3), so the retiree's monthly pension check would have increased. However, the CPI decreased from 2008 to 2009 (from 215.3 to 214.5), so the retiree's monthly pension check would have decreased. Therefore, the correct choice is B: increased; decreased.

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