Which of the Following Is Not a Reason That the CPI

Multiple Choice

Which of the following is not a reason that the CPI may overstate the actual rate of inflation.

A) improvements in quality are difficult to incorporate in the calculation of the CPI
B) expanded product variety is difficult to incorporate in the calculation of the CPI
C) energy price increases are too heavily weighted in the calculation of the CPI
D) calculation of the CPI does not adequately account for consumer responses to changes in relative prices
E) calculation of the CPI does not adequately account for consumer shifts to discount stores like, Wal-Mart and Target