The fact the consumers substitute one good for another when prices change is
A) a reason why the CPI is used to calculate inflation rates.
B) not taken into account by the fixed market basket used in calculating the CPI.
C) a reason why the CPI understates the actual change in the cost of living.
D) not important to economists.
E) taken into account by the fixed market basket used in calculating the CPI.
Correct Answer:
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