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.

---

Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved in basic emotions and drives.

Motor Cortex

An area of the cerebral cortex that plays a crucial role in planning, controlling, and carrying out voluntary movements.

Prefrontal Cortex

The prefrontal cortex is a region of the brain associated with decision-making, cognitive behavior, personality expression, and moderating social behaviour.

Stage 1 Sleep

The initial phase of the sleep cycle, characterized by light sleep and ease of awakening.