If a New and Better Good Replaced an Older and Less

question 313

Multiple Choice

If a new and better good replaced an older and less expensive good, then the price level measured by the CPI .

• A) is higher than the actual price level
• B) is the same as the actual price level because it measures the prices of the actual goods.
• C) might be either higher or lower than the actual price
• D) is lower than the actual price level

---

Definitions:

Fama And French

Fama and French are economists Eugene Fama and Kenneth French, known for their work on asset pricing models, including the three-factor model that considers market, size, and value factors in portfolio returns.

Regression Coefficient

A number that represents the relationship between a dependent variable and an independent variable in statistical models, indicating the strength and direction of the correlation.

Single Factor Model

A financial model that describes an asset's returns as dependent on a single market index or factor.

Fama-French Three Factor Model

The Fama-French Three Factor Model expands on the Capital Asset Pricing Model by incorporating three factors: market risk, size risk, and value risk, to explain stock returns.