3. If the Consumer Price Index (CPI) overstates the true rate of inflation, the use of the CPI to adjust nominal incomes results in
A) understating gains in real incomes.
B) overstating gains in real incomes.
C) an accurate statement of gains in real incomes.
D) nominal values equaling real values.
E) an arbitrary redistribution of income.

15. The CPI equals 120 in year one and 132 in year two. If the nominal wage is $15 in year one and a contract calls for the real wage to increase by 4%, what will be the nominal wage in year two?
A. $16.50
B. $15.00
C. $15.60
D. $17.16
E. $17.10

And this question,

2. The consumer price index for Planet Econ consists of only two items: books and hamburgers. In 2009, the base year, the typical consumer purchased 5 books for $20 each and 30 hamburgers for $1 each. In 2010, the typical consumer purchased 8 books for $22 each and 36 hamburgers for $1.50 each. The consumer price index for 2010 on Planet Econ equals
A. 100
B. 108
C. 115
D. 123
E. 119