Ignoring the issue of whether the CPI overstates the cost of living generally, the fact that the poverty line is adjusted using the overall CPI to adjust for overall inflation means that if the costs of necessities rises

Question

Quizplus · Accepted Answer

If the costs of necessities rises faster than the overall CPI, the poverty line is understated because the overall CPI does not accurately capture the increase in the cost of necessities. This means that the poverty line is not being adjusted enough to keep up with the increased costs of living, resulting in more people falling below the poverty line.

Ignoring the Issue of Whether the CPI Overstates the Cost