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A Quality-Change Bias in the Construction of the CPI Arises

Question 91

Multiple Choice

A quality-change bias in the construction of the CPI arises because:


A) new goods and services are routinely introduced and many of them are not incorporated into the market basket that makes up the CPI.
B) big box stores that carry electronic goods routinely run sales to reduce their inventories before stocking new models.
C) newer versions of a product might be more expensive but could also be better than the older version.
D) consumers also shop at superstores or outlet stores.

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