Price Changes from Year to Year Are Not Proportional,and Consumers

question 115

Multiple Choice

Price changes from year to year are not proportional,and consumers respond to these changes by altering their spending patterns.The problem this creates for inflation calculations is called

• A)deflation.
• B)inflation.
• C)unmeasured quality change.
• D)substitution bias.

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Definitions:

Principal

The party that an agent’s authority can bind or act on behalf of.

Agency

The fiduciary relationship that arises when one person consents to have another act on his behalf and subject to his control and the other consents to do so.

Power of Attorney

A legal document that grants one individual (the agent) the authority to act on behalf of another (the principal) in legal or financial matters.

Legal Documents

Legal documents are formal written records that are drafted and executed in accordance with legal requirements, often used to establish rights, obligations, or agreements.