Suppose That a CPI Basket Includes Avocadoes, Pineapples and Oranges

Multiple Choice

Suppose that a CPI basket includes avocadoes, pineapples and oranges. Avocadoes become very expensive, and consumers substitute away from avocadoes and buy hummus instead. If the CPI basket does not change to reflect the move away from avocados, the result is:

A) understated inflation.
B) the failure to capture real variables versus nominal variables.
C) substitution bias.
D) quality bias.