A 5 Percent Increase in the Consumer Price Index (CPI)

Multiple Choice

A 5 percent increase in the Consumer Price Index (CPI) means a

A) 5 percent increase in the cost of living.
B) less than 5 percent increase in the cost of living because consumers substitute cheaper products for those whose prices rise.
C) more than 5 percent increase in the cost of living because consumers substitute cheaper products for those whose prices rise.
D) less than 5 percent increase in the cost of living because of falling quality of products over time.
E) more than 5 percent increase in the cost of living because of the introduction of new products.