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Which of the Following Statements About the CPI Is/are Correct

question 128

Multiple Choice

Which of the following statements about the CPI is/are correct?
i.The only significant bias in the CPI is the commodity substitution bias.
ii.In Australia it is estimated the CPI overstates inflation by 1.1 percentage points a year.
iii.The RBA estimates that substitution bias is about 0.5 percentage points.


Definitions:

Gold Funds

Investment funds that focus on investing in gold and gold-related assets, offering a way to gain exposure to the price movements of gold.

Significance Level

The probability of rejecting the null hypothesis when it is actually true, used as a threshold in hypothesis testing.

Mean Percentage Rates

Average rates expressed as a percentage over a specified period.

Three Funds

An investment strategy that typically involves a combination of three mutual funds to create a diversified portfolio.

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