The "New Product Bias" in the Consumer Price Index Refers

question 2

Multiple Choice

The "new product bias" in the consumer price index refers to the idea that

• A)consumers switch to new goods when the prices of old goods increase,and the CPI overestimates the cost to consumers.
• B)consumers switch to old goods when the prices of new goods increase,and the CPI underestimates the cost to consumers.
• C)consumers prefer new goods,even if they are worse in quality than old goods,and this causes the CPI to underestimate the cost to consumers.
• D)new products' prices often decrease after their initial introduction,and the CPI is adjusted infrequently and overestimates the cost to consumers.

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Definitions:

Appetite

The natural desire to satisfy a bodily need, especially for food.

Osteoporosis

A bone disease that occurs when the body loses too much bone, makes too little bone, or both, leading to fragile and easily breakable bones.

Diets

Planned and regulated food intake, often tailored for weight loss, health improvement, or medical conditions.

Self-starvation

An extreme reduction in food intake, often associated with psychological conditions such as anorexia nervosa.