Suppose That Dairy Products Have Risen in Price Less Than

question 88

Multiple Choice

Suppose that dairy products have risen in price less than prices in general over the past several years. Which problem in the construction of the CPI is this price increase most relevant to?

• A) substitution bias
• B) introduction of new goods
• C) unmeasured quality change
• D) income bias

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Definitions:

Unfunded Promises

Commitments or obligations, especially by a government, for which no money has been set aside to fulfill them.

Economic Theory

A set of principles and frameworks that aim to explain and predict the behaviors of individuals, firms, and governments in an economy.

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A government program that provides financial assistance to people with inadequate or no income, especially the elderly, disabled, and unemployed.

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Government-funded health insurance schemes in the United States primarily for people aged 65 and older, as well as for some younger individuals with disabilities.