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In the 1970s, a Period of a High Rate of Inflation

Question 84

Multiple Choice

In the 1970s, a period of a high rate of inflation, a news magazine article listed people who were Losing from inflation because their real purchasing power was falling. Those who lost the most Were university professors. Which of the following explains this?


A) Their wage rates increased more rapidly than the CPI.
B) The marginal benefit of their work was falling.
C) The professors' market basket was different than the market basket used to calculate the CPI.
D) The professors suffered from the CPI bias.
E) Their wage rates did not increase as much as the CPI.

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