By not taking into account the possibility of consumer substitution,the CPI
A)understates the cost of living.
B)overstates the cost of living.
C)may overstate or understate the cost of living,depending on how quickly prices rise.
D)may overstate or understate the cost of living,regardless of how quickly prices rise.

Question

Quizplus · Accepted Answer

The CPI often overstates the cost of living because it doesn't account for consumers switching to cheaper alternatives when prices rise, which can lead to an overestimation of the actual increase in the cost of living.

By Not Taking into Account the Possibility of Consumer Substitution,the