Multiple Choice
When the quality of a good improves, what happens to the purchasing power of the dollar?
A) It increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
B) It increases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
C) It decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
D) It decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
Correct Answer:
Verified
Correct Answer:
Verified
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