Which of the Following Makes the Consumer Price Index a Less

question 70

Multiple Choice

Which of the following makes the Consumer Price Index a less accurate measure of the cost of living?
I. the monthly price survey conducted to collect information about prices is very unreliable
Ii. the existence of a new goods bias in the calculation of the CPi
Iii. the existence of a quality change bias in the calculation of the CPI

• A)i only
• B)ii only
• C)ii and iii
• D)i and ii
• E)i, ii, and iii

---

Definitions:

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief or behavior or for a chain of reasoning.

Behavioral Predictions

The process of forecasting individual or group behaviors based on past actions, trends, or patterns.

Overconfidence

The tendency to hold too strong a belief in one's own abilities, judgments, or predictions, often leading to errors or mistakes.

Common Sense

Practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by nearly all people.