Because of the biases in calculating the CPI, actual inflation is
A) accurately measured.
B) less than the measured inflation rate by about 1 percent per year.
C) more than the measured inflation rate by about 1 percent per month.
D) more than the measured inflation rate by about 1 percent per year.

Question

Quizplus · Accepted Answer

The biases in calculating the CPI tend to overstate inflation. According to many economists, the actual inflation rate is lower than the measured inflation rate by about 1 percent per year. Therefore, option B is the best choice.

Because of the Biases in Calculating the CPI, Actual Inflation