Author Question: What do economists believe about the CPI? a. It underestimates increases in the cost of living. b. ... (Read 61 times)

laurencescou · **on:** Jul 24, 2018

What do economists believe about the CPI?
a. It underestimates increases in the cost of living.
b. It overestimates increases in the cost of living.
c. It has almost nothing to do, really, with the cost of living.
d. It does a great job of measuring the cost of living.

Question 2

One criticism of the CPI is that the market basket used in the CPI may not reflect current spending priorities. Why does this problem occur?

irishcancer18 · **Reply #1 on:** Jul 24, 2018

Answer to Question 1

B

Answer to Question 2

THE MARKET BASKET OF GOODS AND THE WEIGHTS ASSIGNED TO THEM ARE CHANGED INFREQUENTLY. THEY DO NOT REFLECT RAPID CHANGES IN LIFESTYLE AND TECHNOLOGY (FOR EXAMPLE, CELL PHONES AND DVD PLAYERS, MOST RECENTLY).

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