13 . Problems and Applications Q8

Social Security benefits are increased each year in proportion to the increase in the CPI, even though most economists believe that the CPI overstates actual inflation.

True or False: If the elderly consume the same market basket as other people, then Social Security would provide an increase in their standard of living.

___True

___False

Healthcare costs have risen faster than overall inflation.

True or False: If the elderly consume a market basket that includes more healthcare than other people, then Social Security would have an uncertain impact on their standard of living.

___True

___False