Final answer:
The limitations with the inflation rate based on Consumer Price Index (CPI) are the substitution bias and the exclusion of online prices.
Step-by-step explanation:
Two limitations with the inflation rate based on Consumer Price Index (CPI) are the substitution bias and the exclusion of online prices. The substitution bias occurs because the CPI assumes that consumers will substitute lower-priced items for higher-priced ones when prices rise. However, this may not accurately reflect actual consumer behavior. Additionally, the CPI tracks prices from physical locations and does not include prices from online retailers, like Amazon, where prices may be lower.