Multiple Choice
When the quality of a good deteriorates while its price remains the same,the purchasing power of the dollar
A) increases,so the CPI overstates the change in the cost of living if the quality change is not accounted for.
B) increases,so the CPI understates the change in the cost of living if the quality change is not accounted for.
C) decreases,so the CPI overstates the change in the cost of living if the quality change is not accounted for.
D) 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
Q20: If the cost of housing increases by
Q21: The CPI is a measure of the
Q21: When the quality of a good improves
Q22: Assume an economy experienced a positive rate
Q23: Every unit of good x that is
Q25: With respect to the consumer price index,which
Q27: Which of the following statements best represents
Q28: The price index was 150 in the
Q29: Suppose the price index was 105 in
Q86: The consumer price index tries to gauge