Quality changes are:
A) easily accounted for in the consumer price index (CPI).
B) always included in the CPI.
C) included in the gross domestic product (GDP) deflator but not the CPI.
D) generally included in both the CPI and the GDP deflator.
E) at least partially adjusted for in the CPI.

Question

Quizplus · Accepted Answer

Quality changes are at least partially adjusted for in the CPI through hedonic pricing. Hedonic pricing is a method used to account for quality changes by estimating the value of individual features and characteristics of a product and adjusting their relative importance in the price index. However, the degree to which quality changes are adjusted for in the CPI can vary depending on the availability of data and the level of sophistication of the methodology used.

Quality Changes Are