The problems with using the consumer price index as a measure of the cost of living are important because
A)even the appearance of high rates of inflation cause voters to become disenchanted.
B)politicians have manipulated the measurement problems to their advantage.
C)many government programs use the CPI to adjust for changes in the overall level of prices.
D)if the price level is overstated,consumers will be taken advantage of by sellers of consumer goods.

Question

Quizplus · Accepted Answer

Many government programs such as social security payments, tax brackets, and welfare benefits use the CPI to adjust for changes in the overall level of prices. Any errors in measuring the CPI can therefore have significant consequences for individuals who rely on these programs. Additionally, if the CPI overstates the price level, consumers may end up paying more for goods than they should, which can be problematic. While A and B are also potential issues, they are not as directly related to the use of the CPI as a measure of the cost of living.

The Problems with Using the Consumer Price Index as a Measure