Related to the Economics in Practice on p. 453: 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

A chain-linked CPI accounts for changes in consumer behavior and substitution between goods, typically resulting in a lower inflation rate compared to a fixed-weight CPI. Therefore, a pension tied to a chain-linked CPI would grow slower.

Related to the Economics in Practice on P