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

Question

Quizplus · Accepted Answer

Quality changes are at least partially adjusted for in the CPI. For example, if the quality of a computer improves over time (e.g., faster processing speed, more memory), the CPI will adjust for that improvement by assuming that the price of the computer has decreased relative to its improved quality. However, it is important to note that not all quality improvements are included in the CPI, as some may be difficult to measure or quantify.

Quality Changes