The "new product bias" in the consumer price index refers to the idea that
A) consumers switch to old goods when the prices of new goods increase, and the CPI underestimates the cost to consumers.
B) consumers switch to new goods when the prices of old goods increase, and the CPI overestimates the cost to consumers.
C) new products' prices often decrease after their initial introduction, and the CPI is adjusted infrequently and overestimates the cost to consumers.
D) consumers prefer new goods, even if they are worse in quality than old goods, and this causes the CPI to underestimate the cost to consumers.
C
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A) Saving B) Expected rate of inflation C) Real interest rate D) Real income
The individual countries of the Eurozone are on which side of the "policy trilemma"?
A) free capital mobility and independent monetary policy B) free capital mobility and fixed exchange rate C) fixed exchange rate and independent monetary policy D) fixed exchange rate and capital controls