The actual cost of living increase for a household will be:
A) Greater than the inflation rate as reported by the CPI since the index excludes the product or service with the highest inflation rate for the past 12 months
B) Lower than the inflation rate as reported by the CPI since the index excludes the product or service with the lowest inflation rate for the past 12 months
C) Equal to the inflation rate as reported by the CPI since it includes all products and services whether or not the prices have changed in the past 12 months
D) Either greater than or less than the inflation rate as reported by the CPI depending on the household's cost of necessities purchased
E) Zero since the CPI does not measure consumer price changes
Correct Answer:
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