The bias in the CPI typically
A) cannot be measured or estimated.
B) overstates inflation.
C) understates inflation.
D) about half the time overstates and about half the time understates the inflation rate.

Question

Quizplus · Accepted Answer

The bias in the Consumer Price Index (CPI) typically overstates inflation because it does not fully account for changes in consumer behavior, quality improvements, and new products.

The Bias in the CPI Typically