If the CPI Is Used as a Cost of Living

Multiple Choice

If the CPI is used as a cost of living index, incomes that are adjusted to reflect the changes in the CPI will

A) decrease by more than the actual change in the cost of living.
B) decrease by more than the actual change in quantities.
C) increase by more than the actual change in the cost of living.
D) increase by more than the actual change in quantities.
E) generally rise by about 2 per cent a year because the standard of living generally rises by about 2 per cent a year.