Question

The purpose of indexing Social Security payments to increases in the consumer price index is to:

a- increase corporate profits.

b- justify continued government funding of the Bureau of Labor Statistics.

c- avoid the privatization of Social Security.

d- maintain the purchasing power of retirees.

Answer 1

The indexing of Social Security payments to the consumer price index is designed to maintain the purchasing power of retirees by adjusting benefits in line with inflation.

Step-by-step explanation:

The purpose of indexing Social Security payments to increases in the consumer price index (CPI) is primarily to maintain the purchasing power of retirees. By adjusting Social Security benefits to reflect the CPI, the program ensures that benefits increase with the cost of living, preventing inflation from eroding the value of the payments that retirees receive. This measure allows for the preservation of financial stability for individuals who rely on Social Security income during their retirement.