When the quality of a good deteriorates, what happens to the purchasing power of the dollar?

Question

Quizplus · Accepted Answer

When the quality of a good deteriorates, consumers get less value for their money. This means the purchasing power of the dollar decreases, as it can buy fewer goods and services. If the quality change is not accounted for, the CPI will not accurately reflect the change in the cost of living, as it will overstate the purchasing power of the dollar. Therefore, the correct answer is D.

When the Quality of a Good Deteriorates, What Happens to the Purchasing