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Which of the following is NOT a feature of the CPI Is calculated from a fixed...

Which of the following is NOT a feature of the CPI

Is calculated from a fixed "basket" of goods

reflects prices of both consumer goods and intermediate goods

tends to overstate the true increase in the cost of living

is available monthly
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Answer #1

Answer: '' Tends to overstate the true increase in the cost of living (option 3rd)'' is not the feature of the CPI.

EXPLANATION: If quality is improved or new basket of goods are amend, Consumer Price Index (CPI) will then only increase. In this scenario the cost of living will truely increase. But in other scenario if the CPI is same in that month/year, the true increase in the cost of living will not increase and it will remain same.

Hence option 3rd is not the true feature of CPI.

Hope it helps!!

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