Question

For some racquet sports, there have been increases in the size of the racquets; also, the methods and materials used for making racquets have improved. To which problem in the construction of the CPI is this situation most relevant?

a. substitution bias
b. introduction of new goods
c. unmeasured quality change
d. income bias

Answer 1

Answer:

The correct answer is C

Explanation:

The CPI stands or termed as Consumer Price Index, which is defined as the measure which evaluate the weighted average of the prices of the basket of the customer goods and services.

Unmeasured quality change is defined as if the quality of the good increases from year to year, then the dollar value is increasing even though the actual prices are constant.

So, the sports is involved in increasing the size as well as materials used in making the racquet is improving. Therefore, the problem which is relevant is that unmeasured quality change.