What is the best definition of “inflationary bias” in this context?
Read the following passage and then answer the question that follows.
Since 1995, the Bureau of Labor Statistics (BLS) has been eliminating or reducing
biases in the Consumer Price Index (CPI). Many economists believe that the BLS
improvements have cut inflationary bias in half, and it is now estimated to be less
than 1 percentage point per year.
a. the tendency to believe that inflation is beneficial to the economy
b. the tendency to promote policies that cause a positive inflation rate
c. the tendency to overstate the rate of inflation
d. the tendency of the members of an economy to push prices up
c. the tendency to overstate the rate of inflation
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Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a
a. shortage to exist and the market price of roses to increase. b. shortage to exist and the market price of roses to decrease. c. surplus to exist and the market price of roses to increase. d. surplus to exist and the market price of roses to decrease.
The basic idea behind the 1996 changes in the welfare program was to
a. eliminate poverty in the United States b. eliminate the idea that welfare was an entitlement c. create a new class of workers in the United States d. eliminate the food stamp program e. provide the poor with jobs