If there is an increase in the price of bananas that causes consumers to purchase fewer pounds of bananas and more pounds of grapes, the CPI will suffer from a. substitution bias b. bias due to the introduction of new goods Ocbias due to unmeasured quality change d. base-year bias e none of the answer choices

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Economic Fluctuations, Unemployment, And Inflation
Section: Chapter Questions
Problem 10CQ
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If there is an increase in the price of bananas that causes consumers to purchase fewer pounds of bananas and more pounds of grapes, the CPI will suffer from
a. substitution bias
b. bias due to the introduction of new goods
Ocbias due to unmeasured quality change
d. base-year bias
e none of the answer choices
Transcribed Image Text:If there is an increase in the price of bananas that causes consumers to purchase fewer pounds of bananas and more pounds of grapes, the CPI will suffer from a. substitution bias b. bias due to the introduction of new goods Ocbias due to unmeasured quality change d. base-year bias e none of the answer choices
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