All of the Following Can Create a Bias in the CPI

question 121

Multiple Choice

All of the following can create a bias in the CPI EXCEPT the

• A)new goods bias.
• B)outlet substitution bias.
• C)commodity substitution bias.
• D)GDP price index bias.
• E)quality change bias.

---

Definitions:

Public Good

A good that is non-excludable and non-rivalrous, meaning that its use by one individual does not reduce its availability to others and people cannot be prevented from using it.

Marginal Cost

The increase in total production costs resulting from producing one additional unit of a good or service.

Market Allocating Resources

The process through which a free market economy determines the distribution of resources based on supply and demand dynamics.

Flu Shots

Vaccinations that protect against the influenza virus, recommended annually to prevent the spread of the flu.