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Category - Economics

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How does the government measure inflation?

It polls prominent economists.
It measures changes in the value of the US dollar and Treasury bonds.
It measures the change in value of a long list of values.
It measures the change in value of a long list of wages and salaries.

Explanation

Answer: C - The government measures inflation by measuring the change in a long list of items that people might spend money on. This “inflation basket” is meant to be representative of how people spend their money. Deciding what items should be included can be a source of controversy.

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