Recall the Application about the time involved in including cell phones in the calculation of the CPI to answer the following question(s).
-According to the Application, as new products are constantly invented and introduced on the market,
A) the bias in the CPI can be large.
B) the bias in the CPI tends to become smaller.
C) the bias in the CPI will eventually disappear.
D) the bias in the CPI will remain virtually unchanged.

Question

Quizplus · Accepted Answer

The introduction of new products can lead to a delay in their inclusion in the Consumer Price Index (CPI), which can cause the CPI to not fully reflect current market conditions or consumer spending patterns. This delay can result in a bias in the CPI, making it potentially larger because it might not accurately capture the price changes of newly introduced products until they are included.

Recall the Application About the Time Involved in Including Cell