pling Determine if each statement is True or False. Every statement belongs in a

Question

pling Determine if each statement is True or False. Every statement belongs in a bin. True False The CPI is based on GDP statistics When the quality of a product in the market basket rather than a survey of prices falls, the price index will understate the cost of living. When the quality of a product in the market basket The CPI measures changes in the cost rises, the price index will understate the cost of living. of living rather than actual inflation. The purpose of indexing in wage contracts is to keep real wages from rising due to inflation. Mapa

Explanation / Answer

TRUE

When the quality of the product in market basket rises, the index understates the cost of living

CPi measures change in thecost of living

FALSE

CPI is based on GDPstatistic rather

the quality of the product in market basket falls, the index underestimates the cost of living

the purpose of indexing in wage contracts is to keep rea wages from rising.

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