If the CPI overstates the true rate of inflation,then
A) the economy will grow more slowly than if inflation was measured accurately
B) the economy will grow more rapidly than if inflation was measured accurately
C) social security payments will increase in real terms
D) social security payments will decrease in real terms
E) so will other means of measuring the inflation rate

Question

Quizplus · Accepted Answer

If the CPI overstates inflation, social security payments, which are often adjusted based on CPI, will increase more than necessary, leading to an increase in real terms.

If the CPI Overstates the True Rate of Inflation,then