Rebecca bought a cell phone for $500. A year later, Rebecca's twin sister Rachel bought an upgraded version of the same phone for $500. Which problem in the construction of the CPI does this situation best represent?

Question

Quizplus · Accepted Answer

This situation represents the unmeasured quality change problem in the construction of the CPI because Rachel's upgraded version of the phone may have improved features or technology that were not present in Rebecca's phone from a year earlier. Therefore, the CPI may not accurately reflect the increase in quality between the two phones even though they were sold for the same price.

Rebecca Bought a Cell Phone for $500