do you correct people with a lower mental capacity?

///M3 POWER!

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my cousin will say the darndest things because she just calls it like she sees it. i wouldn't say she's develop mentally ill... i don't mean to offend anybody, i'm not quite sure how mentally ill is defined, so i might be politically incorrect is saying she's like Forrest Gump. it's not until you grill her with a few academic question do you realize she has a slower cognition then most people. i think she might also have Asperger syndrome.

im 17, i live in Seattle, WA. she's 18 and lives 200 miles away in Portland, OR. When my family goes down to visit we do a lot of shopping down there because OR has no sales tax. However she has interpreted this as "your family likes to go shopping. your mom is always shopping and spending money. some of us don't have money like you guys" i tell her we don't actually shop that much but she goes by her observation of our visits. the more i press on in explaining, the more i feel like i'm subtlety telling her she's stupid. so now i just kinda pass off what she says and jokingly go along with her words with sarcasm and a grain of salt.

but it's lead to her getting a pretty twisted idea of my family. So sometimes when she comes up to visit i'll take her out and show her around Seattle and sometimes she'll say things in public about my family and makes things really awkward. which i'm not quite sure how to handle; go along with what she say's and have people think i grew-up with abusive & racist parents, or take 30 minute to correct her and feel like a dick?
 
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