The fact the consumers substitute one good for another when prices change is
A) taken into account by the fixed market basket used in calculating the CPI.
B) not taken into account by the fixed market basket used in calculating the CPI.
C) not important to economists.
D) a reason why the CPI is used to calculate inflation rates.
E) a reason why the CPI understates the actual change in the cost of living.
Correct Answer:
Verified
Q100: The Consumer Price Index (CPI)measures
A)the prices of
Q101: If the CPI is used as a
Q102: When a good gets better from one
Q103: The CPI overstates inflation because the average
Q104: Economists agree that the CPI
A)is a near
Q106: When discussing the CPI,the term "commodity substitution
Q107: Which of the following is a bias
Q108: The CPI is biased because it
A)takes into
Q109: An example of the quality change bias,and
Q110: Which of the following makes the Consumer
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents