CPI might be overstated when a. the menu costs are not taken into account. b. the...
CPI might be overstated when
| a. |
the menu costs are not taken into account. |
|
| b. |
the number of goods and services produced increases. |
|
| c. |
the substitute effect is not taken into account. |
|
| d. |
there is an inflation tax. |
Homework Answers
"C"
when the substitute effect is not taken into account then the CPi are overstated, i..e when price of the goods increase people switch to cheaper substitutes, but that is not measured by the CPI.
Add Answer to:
CPI might be overstated when
a.
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