If the Boskin Commission's conclusion is correct, then the CPI ______ the "true" inflation rate and indexing Social Security benefits to the CPI is ______ the federal government billions of dollars.
A)understates; costing
B)overstates; costing
C)understates; saving
D)measures; saving

Question

Quizplus · Accepted Answer

The Boskin Commission concluded that the Consumer Price Index (CPI) overstates the true inflation rate. As a result, indexing Social Security benefits to the CPI is costing the federal government billions of dollars because it leads to higher benefit payments than necessary.

If the Boskin Commission's Conclusion Is Correct, Then the CPI