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The consumer price index has deficiencies because Multiple Choice quality changes are not registered. it doesn t pick up the consumer s ability to fight
The consumer price index has deficiencies because
Multiple Choice
quality changes are not registered.
it doesnt pick up the consumers ability to fight off inflation by substitution goods in the market basket. Therefore, it overestimates inflation.
it alters the market basket each year in ways that overestimate inflation.
it takes the average of the beginning year price level and the end of year price level. This underestimates inflation at the end of the year.
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