Price indexes can overstate inflation because they
A)do not contain the prices of services.
B)do not contain the prices of any used goods.
C)omit some quality improvements.
D)do not contain the prices of foreign goods.

Question

Quizplus · Accepted Answer

Price indexes can overstate inflation if they fail to account for quality improvements in goods and services, as these improvements can increase the value of a product without necessarily increasing its price.

Price Indexes Can Overstate Inflation Because They