How does commodity subsitution bias influence the CPI? The CPI ____ consumer subsitutions between goods, so when the price of carrots rises and consumers switch to broccoli, the CPI ____ the rise in the price of vegetables. A. ignores; overstates B. incorporates; correctly measures C. ignores; correctly measures D. incorporates; overstates
How does commodity subsitution bias influence the CPI? The CPI ____ consumer subsitutions between goods, so when the price of carrots rises and consumers switch to broccoli, the CPI ____ the rise in the price of vegetables. A. ignores; overstates B. incorporates; correctly measures C. ignores; correctly measures D. incorporates; overstates
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: Measuring The Cost Of Living
Section: Chapter Questions
Problem 6CQQ
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How does commodity subsitution bias influence the CPI? The CPI ____ consumer subsitutions between goods, so when the
A. ignores; overstates
B. incorporates; correctly measures
C. ignores; correctly measures
D. incorporates; overstates
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