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Geoff Goes to the Grocery Store to Make His Monthly

Question 2

Multiple Choice

Geoff goes to the grocery store to make his monthly purchase of coffee. As he enters the beverage section, he notices that the price of coffee has been raised by 15 percent, so he decides to buy some tea instead. Which problem in the construction of the CPI is this situation most relevant to?


A) substitution bias
B) introduction of new goods
C) unmeasured quality change
D) income effect

Correct Answer:

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