Ask Question
15 July, 17:43

The CPI tends to A. estimate inflation correctly. B. underestimate the extent of inflation when prices increase rapidly. C. overestimate inflation by excluding the prices of intermediate products. D. overestimate the extent of inflation because it uses fixed weights and ignores substitution of lower priced items for higher priced items.

+4
Answers (1)
  1. 15 July, 19:51
    0
    d. overestimate the extent of inflation because it uses fixed weights and ignores substitution of lower priced items for higher priced items

    Explanation:

    The CPI tends to overestimate the extent of inflation because it uses fixed weights and ignores substitution of lower priced items for higher priced items
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The CPI tends to A. estimate inflation correctly. B. underestimate the extent of inflation when prices increase rapidly. C. overestimate ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers