When statisticians fail to take into account improvements in the quality of goods and services, the CPI will tend to ________ the rate of inflation.
A)understate
B)precisely measure
C)be unrelated to
D)overstate

Question

Quizplus · Accepted Answer

It's hard to correctly factor in improvement to the quality of goods and services. To the extent that quality improvements are not fully accounted for, the CPI overstates the "true" inflation rate.

When Statisticians Fail to Take into Account Improvements in the Quality