A. overstate the inflation rate, because its market basket is fixed and does
not consider that consumers will substitute away from goods that have risen
dramatically in price.
B. overstate the inflation rate because its market basket is variable and
takes into consideration that consumers will substitute away from goods that
have risen dramatically in price.
C. understate the inflation rate because its market basket is fixed and does
not consider that consumers will substitute away from goods that have risen
dramatically in price.
【正确答案】
A
【答案解析】The CPI uses a relatively small market basket and tends to overstate the inflation rate because it does not consider that consumers will substitute away from goods that have risen dramatically in price.