The Problem with Measuring Inflation Using the CPI Is

question 73

Multiple Choice

The problem with measuring inflation using the CPI is:

• A) that inflation may be understated for people who buy mainly goods and services whose prices are stable.
• B) that inflation may be overstated for people who buy mainly goods and services whose prices are rising faster than the average.
• C) that the CPI has difficulty in accounting for changes in the prices of goods and services.
• D) that the CPI uses a fixed basket of goods and services, and so cannot allow for people substituting towards cheaper goods and services.

---

Definitions:

Obedient

The quality of willingly complying with orders, requests, or laws.

Uninvolved

A parenting or caregiving style characterized by a low level of responsiveness and communication, combined with limited emotional involvement or supervision.

Negligent

Failing to take proper care in doing something, leading to harm or injury to others.

Sexual Maturation

The process of acquiring sexual maturity and reaching reproductive capability.