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

Question

Quizplus · Accepted Answer

The bias in the CPI is generally considered to overstate inflation, as it does not accurately account for changes in product quality, substitution effects, and the introduction of new products.

The Bias in the CPI Typically