As currently calculated, the CPI tends to overstate the true inflation rate because
A. we cannot know what the true inflation rate is.
B. it fails to correctly measure quality changes for some products.
C. the market basket selected is inappropriate.
D. the market basket fails to weigh housing costs sufficiently.
Answer:B
As currently calculated, the CPI tends to overstate the true inflation rate because
A. we cannot know what the true inflation rate is. B. it fails to correctly measure quality changes for some products. C. the market basket selected is inappropriate. D. the market basket fails to weigh housing costs sufficiently.