The "substitution bias" of the CPI refers to the fact that those who construct the CPI are biased away from including certain types of goods in the fixed basket of goods used in their calculations.

Question

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The "substitution bias" in the Consumer Price Index (CPI) refers to the inability of the fixed basket of goods to account for changes in consumer purchasing behavior as they substitute cheaper goods for more expensive ones, not a bias in selecting goods for the basket.

The "Substitution Bias" of the CPI Refers to the Fact