The Substitution Bias in the CPI Results from the Index

question 48

Multiple Choice

The substitution bias in the CPI results from the index not taking into account:

• A)the substitution of new goods for old goods in the purchases of consumers
• B)that consumers substitute towards goods that have become relatively less expensive
• C)the substitution of new prices for old prices in the basket of goods from one year to the next
• D)the substitution of quality for quantity in consumer purchases over time

---

Definitions:

Negotiable Instrument

An official written promise to pay a specified amount of money, which can be demanded at any time or payable at an agreed upon time, identifying the payer on the document.

Secondary Liability

A legal responsibility whereby one party is held liable for the actions of a third party, typically in copyright or partnership cases.

Unauthorized Signature

An unauthorized signature is a signature made without the express permission of the person whose name is signed, often considered fraudulent or voidable.

Negligence

A legal concept where an individual fails to exercise a reasonable level of care, resulting in harm or damage to another person.