Many economists argue that government price indexes overstate inflation by 1 to 2 percent.From the point of view of those designing economic policy,this is an example of:
A) A goal conflict.
B) A measurement problem.
C) A design problem.
D) An implementation problem.

Question

Quizplus · Accepted Answer

The statement presents a measurement problem as the government price indexes overstate inflation. This means that the inflation rate reported by the government is higher than what it actually should be. Economists argue that this issue leads to wrong policy decisions. Therefore, it is a measurement problem.

Many Economists Argue That Government Price Indexes Overstate Inflation by 1