As currently calculated, the CPI tends to overstate the true inflation rate because
A) the market basket fails to weigh housing costs sufficiently.
B) the market basket selected is inappropriate.
C) it fails to correctly measure quality changes for some products.
D) we cannot know what the true inflation rate is.

Question

Quizplus · Accepted Answer

The CPI may overstate inflation because it does not fully account for improvements in product quality, which can make goods and services more valuable without increasing their price.

As Currently Calculated, the CPI Tends to Overstate the True