Question

question
suppose that over time, households used flash sale online retailers at an increasing rate. as a result the cpi is likely to be

select the correct answer below:

underestimated because households would buy products at lower prices than those collected by the u.s. bureau of
labor statistics

underestimated because households would buy products at higher prices than those collected by the u.s. bureau
of labor statistics

overestimated because households would buy products at lower prices than those collected by the u.s. bureau of
labor statistics

overestimated because households would buy products at higher prices than those collected by the u.s. bureau of
labor statistics

Explanation:

The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Flash - sale online retailers often offer products at lower prices. If households increasingly use these retailers but the U.S. Bureau of Labor Statistics (which calculates CPI) is collecting prices from more traditional (higher - priced) sources, the CPI will not fully reflect the lower prices that consumers are actually paying. So, the CPI will be overestimated.

Answer:

overestimated because households would buy products at lower prices than those collected by the U.S. Bureau of Labor Statistics.