By not taking into account the possibility of consumer substitution, the CPI
a. understates the cost of living.
b. overstates the cost of living.
c. may overstate or understate the cost of living, depending on how quickly prices rise.
d. may overstate or understate the cost of living, regardless of how quickly prices rise.
b
You might also like to view...
Which of the following statements about U.S. production is correct?
A. Construction accounts for a larger percentage of total production than does manufacturing. B. Real estate services account for 12.6 percent of the value of total pro-duction, larger than any other item of services or goods. C. Consumption goods and services represent 85 percent of U.S. produc-tion by value and that percentage doesn't fluctuate much. D. The manufacture of goods represents more than 50 percent of total production.
Based on the information above, video games have
a. A unit elastic demand curve b. A inelastic demand curve c. A elastic demand curve d. A perfectly elastic demand curve
Trade allows a country to consume outside its production possibilities frontier
a. True b. False Indicate whether the statement is true or false
When it comes to voting in a presidential election, we would expect, ceteris paribus,
A) a lower percentage of eligible voters will vote if the weather is bad and this makes it harder to get to the polls on election day (than would have voted if the weather was good). B) a higher percentage of eligible voters will vote if the weather is bad on election day (than would have voted if the weather was good). C) many people to vote who are rationally ignorant. D) a higher voter turnout in the North than in the South. E) a and c