Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about
A)one-half to one percentage point.
B)one to two percentage points.
C)one quarter percentage point.
D)one and one-half percentage points.
E)more than two percentage points.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is believed to overstate the true inflation rate by about one-half to one percentage point due to factors like substitution bias, quality changes, and new product introduction.

Most Economists Believe That the Biases in the Consumer Price