Choose the incorrect statement.
A) When the quality of a good improves over time and as a result the price rises, the CPI counts the entire
price rise as inflation and so overstates inflation.
B) The outlet substitution bias injects an upward bias into the CPI.
C) The CPI basket is constantly updated to allow for the introduction of new goods.
D) When relative prices change and people substitute to the lower priced good, the CPI ignores the
substitution and the CPI overstates inflation.
E) All of the above statements are incorrect.
C) The CPI basket is constantly updated to allow for the introduction of new goods.
C) The CPI basket is constantly updated to allow for the introduction of new goods.
You might also like to view...
If the multiplier is 4, the marginal propensity to consume (MPC) must be
A) 0.5. B) 0.25. C) 0.75. D) 1.
Individuals who have stopped looking for work after an active search because of the lack of transportation or lack of affordable child care, etc. are classified as ________ workers
A) very lazy B) marginally attached C) nonfunctional D) non-contributing
Health clubs typically experience an increase in one-year memberships in January, but many new customers cancel their memberships before the end of the year. Which of the following is the best explanation for this behavior?
A) Some people fail to treat their membership fees as sunk costs. B) Some people are overly optimistic about their future behavior. C) Some members receive utility from activities they believe are popular. D) Some health club members suffer minor injuries that prevent them from working out.
Average cost can be thought of as the cost per unit.
Answer the following statement true (T) or false (F)