Suppose the quality of beef changes over time, but the quality change goes unmeasured for the purpose of computing the consumer price index. In which of the following instances would the bias resulting from the unmeasured quality change be least severe?
a. The quality of beef deteriorates and beef becomes more expensive relative to other goods.
b. The quality of beef deteriorates and beef becomes less expensive relative to other goods.
c. The quality of beef improves and beef becomes more expensive relative to other goods.
d. The quality of beef improves and the price of beef relative to other prices remains unchanged.
a
You might also like to view...
A ________ strategy is when a player chooses a different strategy time after time
Fill in the blank(s) with correct word
The Fed's policy is determined by the
A) Federal Open Market Committee. B) Executive Council to the Governor. C) Regional Federal Reserve Banks. D) Board of Governors. E) Federal Monetary Policy Committee.
The income distribution in less-developed nations tends to be
a. more uneven than in developed economies b. less uneven than in developed economies c. similar to that in developed economies d. impossible to calculate e. not comparable because tax structures differ among countries
In general, elasticities measure
A) the change in quantity demanded when a product attribute changes. B) the change in consumer spending when income changes. C) the change in an attribute for a percentage change in price. D) the percentage change in the quantity demanded resulting from a fixed percentage change in some attribute.