Suppose That Dairy Products Have Risen in Price Relatively Less

question 26

Multiple Choice

Suppose that dairy products have risen in price relatively less than prices in general over the last several years.To which problem in the construction of the CPI is this "low" rate of price increase most relevant?

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

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Definitions:

Expected Rate Of Return

The anticipated amount of profit or loss an investment generates, based on historical or estimated performances.

Standard Deviation

A measure of the amount of variability or dispersion of a set of values; used in finance to represent the volatility of an investment.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.