Substitution bias in the CPI refers to the fact that the CPI
A) takes into account the substitution of goods by consumers when relative prices change.
B) takes no account of the substitution of goods by consumers when relative prices change.
C) substitutes quality changes whenever they occur without taking account of the cost of the quality changes.
D) substitutes relative prices for absolute prices of goods.
B
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If 81 percent of Canada's exports go to the United States, a recession in the United States would probably:
a. lead to an economic boom in Canada. b. have no impact on Canada's economy. c. increase imports from Canada. d. decrease Canada's domestic real GDP. e. increase the per capita income in Canada.
In college you practically existed on instant noodles, but now you earn $95,000 a year. You never want to see instant noodles again. We can safely conclude that you consider instant noodles to be a(n)
A. normal good. B. complementary good. C. inferior good. D. luxury.