Why Do Economists Believe That the CPI May Not Be

question 10

Multiple Choice

Why do economists believe that the CPI may not be completely accurate?

• A)Different consumers purchase different baskets.
• B)The CPI is slow to include price decreases for new products, such as iPods.
• C)The CPI is not able to adjust for changes in the price of imports.
• D)Consumers tend to substitute lower-priced items for those in the fixed basket.

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Definitions:

Reinforcement Value

The subjective attractiveness or desirability of a potential reward that influences the likelihood of achieving particular behaviors.

Efficacy Expectation

A belief about one's ability to perform behaviors that should lead to expected outcomes.

Outcome Expectation

Beliefs about the likely results of specific behaviors in given situations.

Behavior Therapy

A form of psychotherapy that focuses on changing maladaptive behaviors through conditioning and learning techniques.