Identify Which of the Following Statements Is False

question 16

Multiple Choice

Identify which of the following statements is false. The "substitution bias" of the CPI:

• A)means that the CPI can either understate or overstate the actual change in cost of living faced by consumers.
• B)refers to the fact that the CPI measures the change in expenditures necessary to consume a fixed basket of goods, whereas in reality the optimal consumption basket changes as prices change.
• C)can be corrected partially by periodically updating the fixed basket of goods used in calculations.
• D)refers to the fact that those who construct the CPI are biased away from including certain types of goods in the fixed basket of goods used in their calculations.

---

Definitions:

Sympathetic Nervous System

The division of the autonomic nervous system that mobilizes the body’s resources during stress and emergencies, preparing the body for action.

Parasympathetic Nervous System

is a division of the autonomic nervous system responsible for rest and digest functions, conserving and restoring energy.

Autonomic Nervous System

The part of the nervous system responsible for the control of bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.

Involuntary Muscles

Muscles that operate automatically without conscious control, such as the heart and muscles in the digestive system.