Commodity Substitution Bias in the CPI Refers to the Fact

question 79

Multiple Choice

Commodity substitution bias in the CPI refers to the fact that the CPI

• A)takes into account the substitution of goods by consumers when relative prices change.
• B)takes no account of the substitution of goods by consumers when relative prices change.
• C)substitutes relative prices for absolute prices of goods.
• D)accounts for improved quality in price rises.
• E)substitutes quality changes whenever they occur without taking account of the cost of the quality changes.

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