Economists have estimated that the CPI ______ inflation by approximately ______ percentage point(s)per year.
A) overestimates; 0.5
B) overestimates; 2.0
C) underestimates; 0.5
D) underestimates; 2.0

Question

Quizplus · Accepted Answer

Economists generally believe that the Consumer Price Index (CPI) tends to overestimate inflation by about 0.5 percentage points per year due to factors like substitution bias and quality improvements not being fully accounted for.

Economists Have Estimated That the CPI ______ Inflation by Approximately