The presence of new goods that are of higher quality than the old goods leads the BLS to

Question

Quizplus · Accepted Answer

When new goods of higher quality are introduced in the market, it becomes difficult to compare the prices of the old and new goods. This is because the new goods may be more expensive due to the higher quality, and not because of inflation. Therefore, the BLS tries to separate the price differences from the improvements in quality. This helps in accurately calculating the inflation rate and the cost of living.

The Presence of New Goods That Are of Higher Quality