The consumer price index is used to set payments from the U.S. government to individuals. To the extent it is biased upward, this index:
A)leads to lower benefits.
B)raises government expenditures.
C)lowers government expenditures.
D)leads to lower benefits and raises government expenditures.

Question

Quizplus · Accepted Answer

If the consumer price index is biased upward, it overstates inflation, leading to higher cost-of-living adjustments and thus increasing government expenditures.

The Consumer Price Index Is Used to Set Payments from the U.S