An example of the commodity substitution bias in the calculation of the CPI is a price increase in
A) a 2012 Toyota Camry versus a 2005 Honda Civic.
B) a GPS unit versus a AAA map book.
C) new homes because people's incomes have increased.
D) etexts versus used books bought through Craigslist.
E) turkey when the price of chicken doesn't rise.
Correct Answer:
Verified
Q10: The real interest rate equals the
A)nominal interest
Q11: If the nominal wage is $30 in
Q12: For the purpose of measuring the cost
Q13: The GDP deflator measures
A)the price level.
B)nominal GDP.
C)the
Q14: The CPI is reported once every
A)quarter.
B)other year.
C)year.
D)week.
E)month.
Q16: Consumers in Beachland consume only two goods,
Q17: The CPI was 170 last year and
Q18: In 1970, the CPI was 39 and
Q19: Suppose the Bureau of Labor Statistics uses
Q20: Economists agree that the CPI
A)is a near
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