This Making the Connection indicates that indexing Social Security payments to the CPI has resulted in a reduction in the standard of living for retirees, because their benefits have not kept up with the rising cost of medical care.
a. Do you think that this situation will improve or worsen in coming years? Briefly explain.
b. Can you think of other groups for whom changes in the CPI are a poor measure of changes in the cost of living? Briefly explain.