Proponents of monetary policy based on fixed rules base their position on the assumption of a vertical aggregate supply curve.

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

A) a trip to Mexico for a couple that had previously taken vacations in Europe. B) a 2014 Honda Civic relative to a 2004 Honda Civic. C) GPS units versus AAA map books. D) textbooks bought through the campus bookstore relative to textbooks via Craigslist. E) olive oil versus vegetable oil.

If Sally purchases a particular compact disk, it is because the opportunity cost is higher than it would be for any other compact disk

a. True b. False