When prices are rising:
A. the Lespeyres index tends to overstate the increase in the cost of living because of the substitution bias.
B. the Lespeyres index tends to understate the increase in the cost of living because of the substitution bias.
C. the Lespeyres index tends to overstate the increase in the cost of living because of the compensating variation bias.
D. the Lespeyres index tends to understate the increase in the cost of living because of the consumer preference bias.
A. the Lespeyres index tends to overstate the increase in the cost of living because of the substitution bias.
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Business cycles are
A) irregular, with some having two recessions and no expansion. B) predictable, with a recession following a trough. C) unpredictable, but always have two phases and two turning points. D) unpredictable, and don't always have two phases and two turning points.
A pecuniary diseconomy occurs when
A. supply exceeds demand. B. higher output levels results in the same unit costs. C. higher output levels results in lower unit costs. D. an expansion of industry output increases the price of an input.
Refer to the table. As compared to production alternative D, the choice of alternative C would:
Answer the question on the basis of the data given in the following production possibilities
table:
A. tend to generate a more rapid growth rate.
B. be unattainable.
C. entail unemployment.
D. tend to generate a slower growth rate.
In order to create an index for consumer prices, the BLS chose
A. 1 to represent the average 1982-1984 price level. B. 100 to represent the average 1982-1984 price level. C. 1 to represent the average 1952-1954 price level. D. 100 to represent the average 1952-1954 price level.