The chapter explains that Social Security benefits areincreased each year in proportion to the increase inthe CPI, even though most economists believe that theCPI overstates actual inflation.a. If the elderly consume the same market basketas other people, does Social Security provide theelderly with an improvement in their standard ofliving each year? Explain.b. In fact, the elderly consume more healthcare comparedto younger people, and healthcare costshave risen faster than overall inflation. Whatwould you do to determine whether the elderlyare actually better off from year to year?

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