Because the CPI is based on a fixed basket of goods, the introduction of new goods and services in the economy causes the CPI to overestimate the cost of living. This is so because
a. new goods and services are always of higher quality than existing goods and services.
b. new goods and services cost less than existing goods and services.
c. new goods and services cost more than existing goods and services.
d. when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.
d
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An outward bowed production possibilities curve illustrates
A) inefficient production. B) the law of increasing additional cost. C) a lack of scarcity. D) zero opportunity cost of moving from inefficient production to currently unobtainable production.
Because the U.S. traditionally gives more foreign aid than it receives, the U.S. traditionally has a negative value for
A) the capital account balance. B) the trade balance. C) investment income. D) net transfers received. E) all of the above