Which of the following are reasons the CPI can overstate the costof livingilt does not take into account that consumers can substitutetoward lower priced goods and services when relative priceschaμ别惫扮

(i) It does not take into account that consumers can substitute toward lower priced goods and services when relative prices change. (ii) It may not fully capture improvements in the quality of goods and services.

Therefore, the reasons the CPI can overstate the cost of living are (i) and (ii). (iii) is not a reason for CPI to overstate the cost of living.