The Substitution Bias in the Consumer Price Index Refers to the Idea

question 6

Multiple Choice

The substitution bias in the consumer price index refers to the idea that consumers ________ the quantity of products they buy in response to price,and the CPI does not reflect this and ________ the cost of the market basket.

• A)change; overestimates
• B)change; underestimates
• C)do not change; overestimates
• D)do not change; underestimates

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Definitions:

Cultural Heritage

The legacy of physical artifacts and intangible attributes of a group or society, including traditions, languages, and values passed down through generations.

Symbolic Ethnicity

A form of ethnicity where attachment to one’s cultural heritage is voluntary, individualistic, and often void of the obligations felt by members of the same ethnic group in past generations.

Casimir Pulaski Day

An observed day in some U.S. states honoring Casimir Pulaski, a Revolutionary War cavalry officer born in Poland, celebrated for his contributions to U.S. independence.

Polish Americans

Individuals of Polish descent residing in America, contributing to its cultural diversity and demographic landscape.