An Example of the Commodity Substitution Bias in the Calculation

question 180

Multiple Choice

An example of the commodity substitution bias in the calculation of the CPI is a price increase in

• A) turkey when the price of chicken doesn't rise.
• B) a GPS unit versus a AAA map book.
• C) a 2011 Toyota Camry versus a 2005 Honda Civic.
• D) etexts versus used books bought through Craigslist.
• E) new homes because people's incomes have increased.

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