Which of These Events Would Cause the Consumer Price Index

question 57

Multiple Choice

Which of these events would cause the consumer price index to overstate the increase in the cost of living?

• A)Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price.
• B)Energy prices decrease,and consumers respond by buying more gas and electricity.
• C)A new good is introduced that renders cellular telephones inferior and obsolete.
• D)All of the above are correct.

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Definitions:

Critical Thinkers

Individuals who actively and skillfully analyze, assess, and reconstruct their thinking, thereby making informed decisions.

Fewest Assumptions

A principle suggesting that the simplest explanation, requiring the least speculative assumptions, is often the most accurate.

Casual Observation

An informal method of gathering data or evidence without a structured framework or hypothesis in mind.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment, characterized by open-mindedness, skepticism, and an analytical approach.