Which of the following is NOT generally considered a problem with using the consumer price index to measure consumer prices?
A) Only private goods are included, and public goods are excluded.
B) Many federal benefits and income tax rates are indexed to the consumer price index.
C) Quality improvements are difficult to account for.
D) New products are often overlooked.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is widely used to adjust federal benefits and income tax rates for inflation, which is not considered a problem with the CPI. Instead, it's a way to ensure that these benefits and taxes keep pace with the cost of living. The other options (A, C, D) highlight recognized issues with the CPI, such as excluding public goods, difficulty accounting for quality improvements, and overlooking new products.

Which of the Following Is NOT Generally Considered a Problem