All of the following are possible sources of bias in using the Consumer Price Index to measure inflation except
A)an improvement in the quality of goods.
B)an increase in the cost of living.
C)rising prices.
D)the introduction of new goods.
E)commodity substitution.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. An increase in the cost of living is what the CPI is designed to measure, not a source of bias. The other options (A, C, D, E) can introduce biases in how accurately the CPI reflects changes in the cost of living or inflation. For example, improvements in the quality of goods (A), the introduction of new goods (D), and commodity substitution (E) can all affect the CPI's accuracy without necessarily reflecting a true change in the cost of living. Rising prices (C) are what the CPI aims to track, but the way it is measured can introduce bias, not the fact of rising prices itself.

All of the Following Are Possible Sources of Bias in Using