Related to the Economics in Practice on p. 133: If a retiree's pension is tied to the CPI, her monthly pension check would tend to grow ________ if the pension is tied to the ________ CPI.
A) slower; fixed-weight
B) slower; chain-linked
C) faster; chain-linked
D) The check would grow at the same rate regardless of the type of CPI to which it is tied.

Question

Quizplus · Accepted Answer

The chain-linked CPI tends to show a lower rate of inflation than the fixed-weight CPI because it accounts for changes in consumer purchasing behavior as prices change, leading to potentially slower growth in pension checks tied to it.

Related to the Economics in Practice on P