00:01
So here we're talking about quality change, right, which is a common bias in the cpi, right? it makes it very, very difficult for the cpi to track.
00:12
And what's happening here is that the quality improves, right? and what you should think of the quality improves is you are getting more for your dollar, right? if the quality improves while the price the same, you are getting more for your dollar, right? your dollar, however much you are spending on this thing, is buying more, right? you are getting a better thing.
00:39
You are getting more, something of higher quality for the same price.
00:42
You are getting more for the dollar, right? you are getting higher purchasing power, right? higher purchasing power.
00:53
So the first part of this is higher purchasing power, right? purchasing power increases.
00:59
So we can immediately say that it is not a, and we can also say that it is not c, right? so because both of those start with decreases.
01:12
So the question is, what does the cpi say? right? so the cpi is going to only see the price change, and it will not fall, right? so the cpi is constant, but purchasing power has gone up, right? so, but the cpi is supposed to measure purchasing power...