If There Is a 5 Percent Increase in the CPI

Multiple Choice

If there is a 5 percent increase in the CPI, then there will most likely be

A) a more than 5 percent rise in the cost of living because of the introduction of new goods.
B) a more than 5 percent rise in the cost of living because consumers substitute away from goods whose relative prices rise towards other goods.
C) a 5 percent rise in the cost of living.
D) a less than 5 percent rise in the cost of living because of falling quality of goods over time.
E) a less than 5 percent rise in the cost of living because consumers substitute away from goods whose relative prices rise towards other goods.