If the cost of medical care increases by 40 percent, then, other things the same, the CPI is likely to increase by about

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Quizplus · Accepted Answer

The cost of medical care is a component of the CPI. If it increases by 40 percent, it will have a direct impact on the overall CPI. However, since medical care is just one of several components of the CPI, the overall increase in the CPI is likely to be less than 40 percent. According to the Bureau of Labor Statistics, medical care accounts for approximately 8.7 percent of the CPI, so a 40 percent increase in this component would result in an overall increase in the CPI of about 2.4 percent (0.4 * 0.087 = 0.0348, or 3.48 percentage points).

If the Cost of Medical Care Increases by 40 Percent