Answered: The CPI might overstate inflation…

The CPI might overstate inflation because consumers may shift consumption to cheaper alternatives. Which bias is this associated with? unmeasured quality variety of goods import bias

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The CPI might overstate inflation because consumers may shift consumption to cheaper alternatives. Which bias is this associated with?

		unmeasured quality
		variety of goods
		import bias
		substitution bias

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