An example of the new goods bias in the calculation of the CPI is a price increase in

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The example of new goods bias is when the CPI includes new products without considering their quality or improvements over previous products. In this case, an iPod player relative to a Walkman can be considered an example of a new good bias as it doesn't consider the quality difference and improvement in technology of an iPod player compared to a Walkman, which is an older product.

An Example of the New Goods Bias in the Calculation