In an economy, for every $1600 decrease in income, spending falls by $1200. It can be concluded that the:

The market system provides a way

a. to allow specialization and exchange to work in tandem. b. to improve the well-being of mankind. c. to harness self-interest. d. to allocate goods and services. e. All of the above are correct.

Substitution bias causes the CPI to understate the increase in the cost of living from one year to the next

a. True b. False Indicate whether the statement is true or false