Under which of the following conditions will there be no substitution bias in the CPI?
A) Lower-priced goods increase in price by a greater percentage than do higher-priced goods.
B) Higher-price goods increase in price by a greater percentage than do lower-priced goods.
C) All goods change in price by the same amount.
D) All goods change in price by the same percentage.
D
You might also like to view...
Refer to Figure 18.4. With an import ban, what is the equilibrium quantity of gloves in Duckland?
A) 100 B) 80 C) 60 D) 40
During the 1870s and 1880s, which technological innovation was NOT introduced?
a. the roller mill to process oatmeal b. steel-bottomed stills c. long-distance pipelines d. the typewriter e. All of the above were introduced.
Economists who prefer a broader definition of money prefer the:
a. M4 measure of the money supply to the M1 measure. b. M2 measure of the money supply to the M1 measure. c. M3 measure of the money supply to the M2 measure. d. prefer the M1 measure of the money supply to the M2 measure.
The principle of horizontal equity is violated if two people who earn the same amount of income actually pay a different amount in taxes.
Answer the following statement true (T) or false (F)