Quality adjustments to changes in the CPI most often result in reductions to the inflation rate calculated from it.

Question

Quizplus · Accepted Answer

Quality adjustments are made to account for changes in the quality of goods and services over time. This means that when an item in the CPI basket improves in quality, its price may rise but its value to consumers also increases. Therefore, the inflation rate calculated from the CPI is adjusted downwards to reflect the increased value of the goods and services.

Quality Adjustments to Changes in the CPI Most Often Result