=+e. Suppose the governments goal in paying COLAs to senior citizens is to insure that seniors become

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=+e. Suppose the government’s goal in paying COLAs to senior citizens is to insure that seniors become neither better nor worse off from price changes. Is the current policy successful if all price changes come in the form of general “inflation”; that is, if all prices always change together by the same proportion? What if inflation hits some categories of goods more than others?

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