Answered

What two outcomes may result if the price of the goods and services in the Consumer Price Index are increasing too rapidly?

A. Consumers can buy less for their dollars.
B. There is a strong chance that inflation is occurring.
C. Consumers can buy more for their dollars.
D. There is a strong chance that deflation is occurring.



Answer :

GinnyAnswer

Final answer:

Inflation leads to decreased purchasing power, while rapidly increasing prices indicate inflation is occurring.


Explanation:

Consumers can buy less for their dollars when the price of goods and services in the CPI increases rapidly. This occurs due to the decreased purchasing power of the currency. Additionally, a rapid increase in prices indicates a strong chance that inflation is occurring, where the overall price level in the economy is rising.


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