In Constructing the CPI,the BLS Has to Deal with Commodity

question 248

Multiple Choice

In constructing the CPI,the BLS has to deal with commodity substitution bias,which is defined as

• A)consumers' substitution of discount stores for full service stores to avoid the higher prices in the full service stores.
• B)consumers' substitution of cheaper goods for goods whose prices increase.
• C)the bias from quality changes in existing products that cause prices to increase.
• D)the bias from new goods being introduced that are more expensive than older goods.
• E)the bias that arises because the BLS changes the CPI market basket each month.

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Definitions:

Timing

The selection of an appropriate or opportune time for an action, event, or decision, particularly in marketing or business contexts.

Current Trends

The latest developments or movements that are gaining popularity or influence in a particular field or industry.

Retailing

The process through which companies sell products and services to consumers for their personal or family use.

Full-Service

Pertaining to businesses or services that offer a comprehensive range of solutions or amenities to their customers, leaving no need unaddressed.