If There Is an Increase in the Price of Apples

question 49

Multiple Choice

If there is an increase in the price of apples which causes consumers to purchase fewer kilograms of apples and more kilograms of oranges, the CPI will suffer from

• A) Consumer preference bias.
• B) Substitution bias.
• C) Base year bias.
• D) Bias due to unmeasured quality change.
• E) Bias due to the introduction of new goods.

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Definitions:

Europe

A continent that forms the westernmost part of the Eurasian landmass, known for its rich cultural heritage, historical significance, and economic and political influence worldwide.

Income Inequality

The unequal distribution of household or individual income across the various participants in an economy, leading to a gap between the wealthy and the poor.

Clinton Administration

The executive period in the United States from 1993 to 2001, under President Bill Clinton, characterized by economic prosperity and several domestic and international challenges.

Economic Significance

The importance of an entity or event in terms of its impact on the economy, relating to wealth, resources, and the production of goods and services.