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Suppose People on Diets Buy the Bulk of the Ground

Question 61

Multiple Choice

Suppose people on diets buy the bulk of the ground chicken and ground turkey sold in the U.S. and they use either interchangeably as a substitute in recipes for ground beef. If the price of ground turkey rises and the price of ground chicken does not the then CPI will


A) understate inflation because of the issue of substitution.
B) overstate inflation because of the issue of substitution.
C) overstating inflation because of the issue of missing "where people shop".
D) understating inflation because of the issue of missing "where people shop".

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