When the consumer price index rises, the typical family
A) has to spend more dollars to maintain the same standard of living.
B) can spend fewer dollars to maintain the same standard of living.
C) finds that its standard of living is not affected.
D) can offset the effects of rising prices by saving more.

Question

Quizplus · Accepted Answer

When the consumer price index rises, it means that the prices of goods and services have increased, so the typical family has to spend more dollars to maintain the same standard of living. For example, if the price of milk increases from $3 to $4, the family would have to spend $1 more to buy the same amount of milk.

When the Consumer Price Index Rises, the Typical Family