Multiple Choice
Which of the following is the most accurate statement about the effects of quality change on the CPI?
A) Even though the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are still a problem because quality is so hard to measure.
B) Because the BLS adjusts the prices of products in the CPI basket when the quality of the products change, changes in quality are no longer a problem for the CPI.
C) The BLS does not adjust the CPI for quality changes.
D) Most economists believe that changes in the quality of goods included in the CPI basket do not bias the CPI as a measure of the cost of living.
Correct Answer:
Verified
Correct Answer:
Verified
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