Suppose hypothetically that you buy a lot of food such as tofu, veggic burgers, and organic fruit that are nor included in the market basket used to compute the CPI. la addition, suppose that all of these have become cheaper over the last year, while the overall CPI has inereased by 6 percent. Then which of the following is true? The CPI will overstate the negative impact of inflation on your purchasing power and standard of living The CPI will still accurately state the negative impact of inflation on your purchasing power and standard of living Inflation has a larger effect on your standard of living than on the average consumer. The CPI will enderstate the negative impact of inflation on your purchasing power and standard of living.
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