Substitution Bias Causes the CPI to Understate the Increase in the Cost

question 209

True/False

Substitution bias causes the CPI to understate the increase in the cost of living from one year to the next.

---

Definitions:

Cultural Heritability

The concept that the culture in which an individual is raised can influence their behaviors, values, and beliefs in a manner similar to genetic inheritance.

Intelligence Tests

Standardized assessments designed to measure cognitive abilities, including reasoning, problem-solving, and understanding.

Chronological Age

The actual age of a person measured in years from their date of birth.

Mental Age

A measure of an individual's cognitive ability expressed as the age at which an average individual reaches the same ability level.