The biases in the CPI include the
A) old goods, unemployment, and inflation biases.
B) substitution, new goods, and old goods biases.
C) new goods, quality change, and substitution biases.
D) old goods, new goods, and quality change biases.

Question

Quizplus · Accepted Answer

The CPI has three main biases: new goods bias (not capturing the price decrease from the introduction of new goods), quality change bias (not adequately accounting for improvements in quality), and substitution bias (not taking into account changes in consumer behavior when prices change).

The Biases in the CPI Include the