When the Quality of a Good Deteriorates While Its Price

question 24

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.

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Definitions:

Thrifty Genotype

A hypothesis that suggests certain populations have a genetic predisposition to efficiently store fat to survive famines, which can lead to obesity in environments with plentiful food.

Food Scarcity

A situation where the availability of food is insufficient to meet the needs of the population, leading to hunger and malnutrition.

Dairying People

Groups or cultures that specialize in the production and processing of milk and milk products for consumption.

Obese

A medical condition characterized by excess body fat that presents significant health risks, including diabetes, heart disease, and various types of cancer.