Final answer:
Improvements in the quality of consumer goods and services actually understate the inflation rate due to the quality/new goods bias in inflation calculations.
Explanation:
False: Improvements in the quality of consumer goods and services tend to understate the inflation rate. This is due to the quality/new goods bias in inflation calculations, which overstates the true rise in the cost of living by not accounting for enhancements in existing goods or the introduction of new products.
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