The substitution bias in the CPI arises because the CPI:
A. is based on a fixed basket of goods and services.
B. does not adequately allow for improvements in products.
C. understates the "true" rate of inflation.
D. measures prices at two different times.
Answer: A
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Explain the dynamic rationale for economic integration among developing countries
What will be an ideal response?
The market-friendly approach to development emphasizes
a. self-interested behavior of public officials in LDCs. b. the dependence of LDCs on former colonial powers. c. the inherent efficiency of markets in developing countries. d. that markets in LDCs fail sometimes and selective interventions can promote economic development.
Given the same unit costs, a monopolist will produce less output than a perfectly competitive firm
a. True b. False Indicate whether the statement is true or false
Joe and Linda have the opportunity to purchase a new home. The house in Glen Oaks is currently worth $250,000 but is predicted to be worth $270,000 in a year. What is the rate of appreciation for the house from one year to the next?
A. 5 percent B. 6 percent C. 7 percent D. 8 percent