When the consumer price index rises, the typical family

a. has to spend more dollars to maintain the same standard of living.

b. can spend fewer dollars to maintain the same standard of living.

c. finds that its standard of living is not affected.

d. can offset the effects of rising prices by saving more.?

Question

Business

Everett Barron

17 August, 15:52

When the consumer price index rises, the typical family

a. has to spend more dollars to maintain the same standard of living.

b. can spend fewer dollars to maintain the same standard of living.

c. finds that its standard of living is not affected.

d. can offset the effects of rising prices by saving more.?

+1

Answers (1)

Know the Answer?

Judith Preston · Answer 1

The answer is A, if the consumer price index will rise then the customer purchasing power will decline, the prices of commodities will increase therefore the family will spend more to buy the usual commodities purchase but with much higher price. The families will spend more money for a fewer goods since the value of the currency has declined.