Multiple Choice
If there is a 5 percent increase in the CPI, then there will most likely be
A) a 5 percent rise in the cost of living.
B) a less than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods.
C) a more than 5 percent rise in the cost of living because of consumers substituting away from goods whose relative prices rise towards other goods.
D) a less than 5 percent rise in the cost of living because of falling quality of goods over time.
E) a more than 5 percent rise in the cost of living because of the introduction of new goods.
Correct Answer:

Verified
Correct Answer:
Verified
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