When Consumers Substitute One Good for Another, This Substitution

question 109

Multiple Choice

When consumers substitute one good for another, this substitution:

• A) is captured by the CPI only if it occurs because of price changes.
• B) is captured by the CPI only if it occurs because of changes in consumers' tastes and preferences.
• C) is always captured by the CPI.
• D) is never captured by the CPI.

---

Definitions:

Great Depression

A severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States and leading to significant declines in industrial production, mass unemployment, and deflation.

Economic Thought

The study and ethoses regarding economics and its methodologies, including the insights and theories developed over time by economists.

Great Recession

A severe global economic downturn that took place from late 2007 to mid-2009, characterized by widespread financial crises and significant job losses.

Economic Theory

A set of principles and models that explain how economies function and how economic agents interact, covering a wide range of topics from microeconomics to macroeconomics.