The Consumer Price Index Is Subject to Substitution Bias Because

question 194

Multiple Choice

The consumer price index is subject to substitution bias because

• A)some pairs of goods are complements rather than substitutes.
• B)some goods are inferior rather than normal.
• C)the law of demand applies to most,if not all,goods.
• D)the index does not take into account the likelihood that consumers substitute newly-introduced goods for more-established goods.

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Definitions:

Mammals

Warm-blooded vertebrate animals characterized by the presence of mammary glands which, in females, produce milk for feeding their young.

Major Premise

The first statement in a syllogism, containing the major term that is also in the conclusion.

Syllogism

A form of deductive reasoning that consists of a major premise, a minor premise, and a conclusion, used to infer a relationship between two statements.

Hallucinogenic Drug

A substance that causes hallucinations, or perceptions and sensations that appear real but are not.