The panel of economists appointed by the Senate Finance Committee estimated that the CPI ______ inflation by approximately ______ percentage point(s) per year.
A) overestimates; 1
B) overestimates; 10
C) underestimates; 1
D) underestimates; 10

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) is often criticized for overestimating inflation, typically by a small margin such as 1 percentage point per year, rather than underestimating it or by a large margin like 10 percentage points.

The Panel of Economists Appointed by the Senate Finance Committee