Suppose the Price of Gasoline Rises and Consumers Cut Back

question 57

Multiple Choice

Suppose the price of gasoline rises and consumers cut back on their use of gasoline relative to other consumer goods. This situation would contribute to which bias in the consumer price index?

• A) Substitution bias.
• B) Transportation bias.
• C) Quality bias.
• D) Indexing bias.

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Definitions:

Authenticity

The degree to which an individual's actions are congruent with their beliefs and desires, despite external pressures.

Components

Distinct parts or elements that combine to form a whole system or complex entity.

Awareness

The state or ability to perceive, feel, or be conscious of events, objects, or sensory patterns.

Unbiased Processing

The objective evaluation and interpretation of information, without being influenced by personal prejudices or emotions.