In 2000, You Could Buy a Cadillac DTS for $45,000

Multiple Choice

In 2000, you could buy a Cadillac DTS for $45,000. In 2008, the Cadillac DTS sold for $53,000. While both models include anti- lock brakes and airbags (along with other similar features) , the 2008 model also includes satellite radio and new technology that provides improved gas mileage and safer driving. If the Cadillac DTS was included in the CPI basket, it would create

A) an upward bias in the CPI as a result of commodity substitution bias.
B) a downward bias in the CPI as a result of new goods bias.
C) an upward bias in the CPI as a result of quality change bias.
D) a downward bias in the inflation rate.