AP® Macroeconomics

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Difficult

CPI Reporting Problems

APMACR-LLAYWJ

If CPI does not accurately measure inflation, which of the following may occur?

I. It could be caused by the prevalence of discount chains in the market.
II. COLA allowances will be incorrect.
III. Corporate taxes will be overstated.
IV. Social Security Expenses may be too high or too low.

A

I only.

B

I and II only.

C

I, II, and IV only.

D

II and III only.

E

I, II, III, and IV.