Asked by Adrian Lukmanto on May 30, 2024
Verified
Suppose the typical basket for the calculation of the CPI includes one computer. Since computers have gotten better over time as a result of technological change, what problem does this create for calculating the CPI?
Technological Change
The overall process of invention, innovation, and diffusion of technology or processes.
CPI
Utilizing a weighted average to calculate, the Consumer Price Index serves as a barometer for the price movements of a range of consumer services and goods, including transportation, healthcare, and food items.
- Identify and explain the biases in the CPI calculation.
- Understand how technological advancements affect CPI calculations.
Verified Answer
AK
Anastacia KuzminaJun 02, 2024
Final Answer :
The improvement in the computer over time creates a problem of unmeasured quality change.
Learning Objectives
- Identify and explain the biases in the CPI calculation.
- Understand how technological advancements affect CPI calculations.