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AP® Macroeconomics

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Difficult

CPI Reporting Problems

APMACR-LLAYWJ

If CPI does not accurately measure inflation, then:

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

C

I, II and IV

D

II and III

E

I, II, III and IV