asked 60.8k views
2 votes
When the quality of a good improves while its price remains the same, the purchasing power of the dollar

a. decreases, so the cpi understates the change in the cost of living if the quality change is not accounted for.

b. increases, so the cpi overstates the change in the cost of living if the quality change is not accounted for.

c. decreases, so the cpi overstates the change in the cost of living if the quality change is not accounted for.

d. increases, so the cpi understates the change in the cost of living if the quality change is not accounted for?

1 Answer

4 votes

b. increases, so the cpi overstates the change in the cost of living if the quality change is not accounted for.

answered
User Wildaker
by
8.5k points
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.