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An Example of the Commodity Substitution Bias in the Calculation

Question 124

Multiple Choice

An example of the commodity substitution bias in the calculation of the CPI is a price increase in


A) new homes because people's incomes have increased.
B) e-books versus used books bought through the university bookshop.
C) a GPS unit versus a Melways map book.
D) a 2014 Toyota Camry versus a 2005 Honda Civic.
E) turkey when the price of chicken doesn't rise.

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