=+c. Now suppose that the price of x1 went up but the price of x2 stayed the

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=+c. Now suppose that the price of x1 went up but the price of x2 stayed the same. Illustrate how the government will change the average senior’s budget constraint when it calculates and passes along the COLA. Will the senior alter his behavior? Is he better off, worse off, or unaffected?

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