The substitution bias in the customer price index refers to, Ask an Expert

Economics

The substitution bias in the customer price index refers to the:

1. Substitution by consumers toward new goods and away from old goods.

2. Substitution of new prices for old prices in the CPI basket of goods and services from one year to the next.

3. Substitution by consumers toward goods that have become relatively less expensive and away from goods that have become relatively more expensive.

4. Substitution by consumers toward a smaller number of high-quality goods and away from a larger number of low-quality goods.

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91224781

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question if banks borrow from the feds discount window what

Question: If banks borrow from the Fed's discount window, what would happen to the money supply (assume no offsetting Fed actions)? Explain. True, false, or uncertain: The Federal Reserve prints money (currency) to activ ...

Quesiton suppose there are two individuals and two goods

Quesiton: Suppose there are two individuals and two goods. The initial endowments are ?1 = (1, 0) and ?2 = (1, 1). Preferences are given by u1(x, y) = x + y and u2(x, y) = y (a) Prove that in equilibrium-if it ever exist ...

Question why would the fed choose to keep the funds rate

Question: Why would the Fed choose to keep the funds rate away from equilibrium for extended periods of time? In view of the performance of the economy after this occurred, explain why you would or would not expect the F ...

Question suppose the value of the japanese yen rises 20 but

Question: Suppose the value of the Japanese yen rises 20%, but in order to maintain market share in the US, major Japanese companies decide not to raise the prices. As a result, their imports do not change, but profits o ...

Question what happens to the employment decision if an

Question: What happens to the employment decision if an employer is a price-taker in the market for its output but faces an upward-sloping supply curve of labor, that is, it can only hire additional workers if it raises ...

Question over the next three years a firm is expected to

Question: Over the next three years, a firm is expected to earn economic profits of $120,000 in the first year, $140.000 in the second year, and $1000,000 in the third year. After the end of the third year, the firm will ...

Question graphingcalculating questions each of the

Question: Graphing/Calculating Questions: Each of the following should include the requested graphic 1. Using LD = 125-9W as a starting labor demand curve, indicate the change when consumers increase their demand for the ...

Question - consider a market with two platforms old and new

Question - Consider a market with two platforms, "old" and "new", that connect between a buyer and a seller. Suppose that if the buyer and the seller join the same platform, the buyer's payoff is 10 and the seller's payo ...

Question 1 what is the difference between the concepts of

Question: 1. What is the difference between the concepts of correlation and of causation? 2. What is the difference between a theory and a hypothesis? 3. What is a variable? 4. Explain the omitted variable problem, using ...

Question if economists generally agree that fixed-weight

Question: If economists generally agree that fixed-weight price indexes overstate the actual rate of inflation, why is the CPI still the most popular and widely quoted measure of inflation? The response must be typed, si ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert