Question

Imagine that you are having a conversation with your neighbor. You report that you have just seen the news release that the inflation in 2015 was 2.1% in the US. Your neighbor responds, “Ah, government statistics; you can’t trust them. My car payment went up, my college tuition went up, and even my apartment rent went up. I know I am spending more, and the increase has definitely been more than the 2.1% you cite. The government is just playing games with the numbers, just trying to pretend that the prices are rising slower than they actually are to keep us happy.” Can your neighbor be right in thinking that his cost of living rose by more than the 2.1% rise in CPI? Is he right that the “government is just playing games with the numbers”? Please write how you would respond to your neighbor, basing your answer on what you have learned in this session. Please begin your answer with “Dear Neighbor, I understand your concern …

Answer 1