Multiple Choice
Choose the incorrect statement.
A) The outlet substitution bias injects an upward bias into the CPI.
B) When the quality of a good improves over time and as a result the price rises, the CPI counts the entire price rise as inflation and so overstates inflation.
C) When relative prices change and people substitute to the lower priced good, the CPI ignores the substitution and the CPI overstates inflation.
D) The CPI basket is constantly updated to allow for the introduction of new goods.
E) All of the above statements are incorrect.
Correct Answer:
Verified
Correct Answer:
Verified
Q3: Which one of the following people would
Q4: If prices at Wendy's rise, more consumers
Q5: In a country with a working-age population
Q6: The CPIC<br>A)does not overcome the source of
Q7: People become unemployed when they<br>A)retire.<br>B)are on maternity
Q9: If the number of discouraged searchers increases,
Q10: In a country with a working-age population
Q11: Counting discouraged searchers as unemployed would<br>A)not change
Q12: If the economy is at full employment,
Q13: In a recession, typically<br>A)unemployment rises.<br>B)the employment-to-population ratio