Suppose that the prices of dairy products have risen relatively less than prices

Question

Suppose that the prices of dairy products have risen relatively less than prices in general over the last several years. To which problem in the construction of the CPI is this situation most relevant? Answer a. income bias b. substitution bias c. introduction of new goods d. unmeasured quality change Suppose that the prices of dairy products have risen relatively less than prices in general over the last several years. To which problem in the construction of the CPI is this situation most relevant? income bias substitution bias introduction of new goods unmeasured quality change a. income bias b. substitution bias c. introduction of new goods d. unmeasured quality change

Explanation / Answer

substitution bias b. substitution bias

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