Suppose that over time,consumers used discount stores at an increasing rate,the CPI would tend to be
A) accurate
B) underestimated because consumers would buy goods and services at lower prices than those collected by the BLS
C) underestimated because consumers would buy goods and services at higher prices than those collected by the BLS
D) overestimated because consumers would buy goods and services at lower prices than those collected by the BLS
E) overestimated because consumers would buy goods and services at higher prices than those collected by the BLS

Question

Quizplus · Accepted Answer

The CPI would be overestimated because it may not fully account for the shift to discount stores where consumers pay lower prices, leading to a higher reported inflation rate than what consumers actually experience.

Suppose That Over Time,consumers Used Discount Stores at an Increasing