Which statement does NOT describe a problem in measuring the consumer price index (CPI)?
A) The CPI measures only private goods and services.
B) The CPI uses a fixed market basket of goods determined by surveys that are three to five years old.
C) Approximately 10% of the original market basket must be replaced each year by products that are improved or modified.
D) The CPI includes new products in its baskets.

Question

Quizplus · Accepted Answer

The statement "The CPI includes new products in its baskets" is not a problem in measuring the CPI. In fact, it is an improvement because it allows for the inclusion of new and innovative products in the market. The other three statements pose potential issues with measuring the CPI.

Which Statement Does NOT Describe a Problem in Measuring the Consumer