What is 'outlet bias'?
A)The tendency for households to spend more money over time.
B)The tendency for households to spend their money at discount stores as prices rise.
C)The tendency for the quality of products to improve over time, even though the CPI does not measure changes in quality.
D)The tendency for consumers to purchase newer, more technologically advanced products even though they have higher prices.

Question

Quizplus · Accepted Answer

Outlet bias refers to the tendency for households to shift their shopping habits to discount stores or outlets as prices for goods and services rise. This is because the Consumer Price Index (CPI), which is used to measure inflation, is calculated based on a fixed basket of goods and services, and does not always take into account changes in consumer behavior. As prices rise, consumers may choose to purchase lower-priced alternatives or shop at discount stores, leading to a potential distortion in the CPI.

What Is 'Outlet Bias