Which of the following does not lead to the CPI underestimating increases in prices?
A)The substitution bias
B)The quality bias
C)The new outlet bias
D)The housing bias

Question

Which of the following does not lead to the CPI underestimating increases in prices?
A)​The substitution bias
B)​The quality bias
C)​The new outlet bias
D)​The housing bias

Quizplus · Accepted Answer

The housing bias does not lead to the CPI underestimating price increases. The other biases (substitution, quality, and new outlet) can cause the CPI to underestimate inflation by not fully capturing consumer behavior or improvements in product quality.

Which of the Following Does Not Lead to the CPI