When the quality of a good improves while its price remains the same, the purchasing power of the dollar
a. increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
b. increases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
c. decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
d. decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
a
You might also like to view...
Using the above figure determine which country has the comparative advantage in the production of corn. In addition, determine which has the comparative advantage in the production of barley
What will be an ideal response?
What do economists mean by "consumer equilibrium?"
Holding other factors constant, if new environmental regulations increase firms' cost of operating capital, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.
A. increase; decrease B. increase; increase C. decrease; decrease D. decrease; increase
Inflation can be defined as
A. a decrease in the purchasing power of money. B. no change in the purchasing power of money. C. an increase in real income. D. an increase in the purchasing power of money.