CARS Section 1 #45

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CARS Section 1 #45

Post by cassie » Sat Nov 18, 2017 1:18 pm

The explanation in the book is not clear to me. May you explain why I and III are arguments that show that standard price indices are inflated and not II?
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Re: CARS Section 1 #45

Post by NS_Tutor_Andrew » Tue Nov 28, 2017 6:47 pm

Hi Cassie,

Thanks for the excellent question! The quickest way to answer is this is that the question specifically asks for points the author makes, and the author doesn't discuss at all the issue of tracking the prices paid by the consumer specifically (as compared to the insurer?) -- instead, the author makes the points in I and III. Whether II could be considered as an argument for price indices being inflated is beside the point -- it could be a good argument or a bad argument, the only thing we need to care about is that it's not an argument the author makes.

Hope this helps and please don't hesitate to reach out with any further questions!
Andrew D.
Content Manager, Next Step Test Prep.
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