In 2000, You Could Buy a Cadillac DTS for $45,000

question 223

Multiple Choice

In 2000, you could buy a Cadillac DTS for $45,000. In 2011, the Cadillac DTS sold for $55,000. While both models include anti-lock brakes and air bags along with other similar features) , the 2011 model also includes satellite radio and new technology that provides improved gas mileage and safer driving. If the Cadillac DTS was included in the CPI basket, it would create

• A) an upward bias in the CPI as a result of commodity substitution bias.
• B) a downward bias in the CPI as a result of new goods bias.
• C) an upward bias in the CPI as a result of quality change bias.
• D) a downward bias in the inflation rate.

---

Definitions:

Openness to Experience

A personality trait characterized by a willingness to try new things and be open to new experiences and ideas.

Personality Factor

An aspect of personality that can be measured and represents significant variation among individuals.

Narrow-Minded

Having a limited or inflexible perspective, often unwilling to consider alternative ideas or viewpoints.

Patterns of Behavior

Repeated actions or reactions that occur in a predictable manner, often based on habits, culture, or psychological conditioning.