Which of the Following Is an Example of Substitution Bias

question 30

Multiple Choice

Which of the following is an example of substitution bias in the consumer price index?

• A) Consumers buy more apples and fewer pears when apples rise in price more rapidly than pears.
• B) Consumers buy more apples and fewer pears when pears rise in price more rapidly than apples.
• C) Consumers rely increasingly on government transfer payments during times of high inflation.
• D) The government substitutes consumer support for military support during times of high inflation.

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Definitions:

Validity

The extent to which a test, tool, or research study accurately measures what it is intended to measure or accurately reflects the real-world phenomena it aims to represent.

Measurement

The process of obtaining a quantitative description of an attribute or phenomenon, typically by comparing it to a standard unit.

Reliability

The extent to which a measurement instrument yields consistent and reliable outcomes across different occasions.

Survey

A method of gathering information from a sample of people, traditionally by asking questions, to generalize the results from the sample to a larger population.