Factors That Cause the CPI to Exaggerate the Inflation Rate

question 74

Multiple Choice

Factors that cause the CPI to exaggerate the inflation rate do not include

• A) the tendency of consumers to substitute relatively cheaper goods for those that have become relatively more expensive
• B) political pressure from unions and retirees on the Bureau of Labor Statistics to overstate the inflation rate
• C) the introduction of new technologies that make it easier to obtain the same standard of living
• D) improvements over time on the quality of products
• E) the increase in purchases from discount stores

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