Which assumption is NOT a problem related to using the consumer price index (CPI) to accurately state the rate of inflation?
A) The CPI assumes that people do not substitute goods.
B) The CPI does not account for quality changes.
C) The CPI does not include new products.
D) The CPI does not deal with producer prices.

Question

Quizplus · Accepted Answer

This assumption is not a problem related to using the consumer price index to accurately state the rate of inflation. The CPI only measures changes in retail prices of goods and services purchased by households, not the prices that producers receive for producing those goods and services.

Which Assumption Is NOT a Problem Related to Using the Consumer