The quality change bias is most likely to put ________ into the CPI and so ________ the inflation rate.

Question

Quizplus · Accepted Answer

The quality change bias refers to the difficulty in adjusting prices in the Consumer Price Index (CPI) for the changes in product quality. This often leads to an upward bias in the CPI because improvements in quality may not be fully accounted for, making it seem like prices are rising faster than they actually are, thus overstating the inflation rate.

The Quality Change Bias Is Most Likely to Put ________