Identify Which of the Following Statements Is False

question 16

Multiple Choice

Identify which of the following statements is false. The "substitution bias" of the CPI:

• A)means that the CPI can either understate or overstate the actual change in cost of living faced by consumers.
• B)refers to the fact that the CPI measures the change in expenditures necessary to consume a fixed basket of goods, whereas in reality the optimal consumption basket changes as prices change.
• C)can be corrected partially by periodically updating the fixed basket of goods used in calculations.
• D)refers to the fact that those who construct the CPI are biased away from including certain types of goods in the fixed basket of goods used in their calculations.

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Definitions:

Financial Inducements

Payments or incentives typically offered to encourage or persuade individuals or organizations to take a particular action.

Surrogacy Contracts

Legal arrangements where a surrogate agrees to carry and deliver a child for another person or couple, specifying rights, obligations, and expectations of all parties involved.

Exploitative

Exploitative describes actions or conditions that take unfair advantage of others, often in a way that is unethical or unjust.

Carson Strong

A person's name, lacking context for a definition without additional information.