PA3: A newspaper article written by the Associated Press in 1994 reported that the U.S. Economy was experiencing a low rate of inflation. It said that “low inflation has a downside: 45 million recipients of Social Security and other benefits will see their checks go up by just 2.8 percent next year.” A. Why does inflation affect the increase in Social Security and other benefits? B. Is this effect a cost of inflation as the article suggests? Why or why not? A. Legislators wish to ensure that the real value of Social Security and other benefits stays constant over time.
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