Let's Say a Company Invents a Very Popular Device Called

question 107

Multiple Choice

Let's say a company invents a very popular device called a Zorgon,which allows you to send small items via a transporter from one place to another.This would affect the consumer price index (CPI) in the sense that the CPI

• A) would fail to include purchases of the Zorgon for some period of time after the product entered the market.
• B) would overstate the cost of the Zorgon because the price would fall over time but the CPI would always be "catching up" and be behind the price decreases.
• C) would take into account substitution between the Zorgon and the use of shipping services such as FedEx and UPS as the relative price of these changed.
• D) would fail to take into account the quality of the Zorgon.
• E) always accurately measures the cost of living.