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Alexxandr [17]
3 years ago
14

Suppose manufacturers introduce a new model car to replace a car currently included in the CPI basket. The price of the new car

is 10 percent higher than the discontinued model, but the new car has additional safety features and amenities. In this situation the CPI will tend to ______ inflation as a result of ______ bias.A. overstate; substitutionB. understate; quality adjustmentC. accurately measure; substitutionD. overstate; quality adjustment
Business
1 answer:
Harlamova29_29 [7]3 years ago
6 0

Answer:

The correct answer is option D.

Explanation:

The consumer price index is a tool to measure inflation in the economy. It measures the change in price level through a basket of goods generally purchased by the households. It does not include change in quality.  

It is measured as

CPI =  

\frac{Cost\ of\ Market\ Basket\ in\ Base\ Year}{ Cost\ of\ Market\ Basket\ in\ Given\ Year} \ \times\ 100

In the given example, the price of the car is increasing but the quality is improving as well. Since the CPI does not include quality, the inflation rate will be overstated.

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The primary results of this increase in distance and geographic complexity are:-

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A seller is a person or entity that sells products, services, or financial assets. Shorting means borrowing security you don't own, selling it, and buying it back at a lower price. An option seller is called a "writer" who collects a premium from the buyer.

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Learn more about sellers here:brainly.com/question/906651

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4 0
1 year ago
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Answer: check

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A <em>check</em> is drawn on a financial institution and is payable upon demand.

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3 years ago
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The finish phase (or termination, or completion phase) of a project life cycle is basically when the project is completed and it is being delivered to the customer. Depending on the project, paperwork and documents are handed out to the customer, contracts with workers and suppliers are terminated. Everyone involved with the project must be notified about its completion and all obligations are paid for.

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Answer:

The correct answer is letter "C": Cash, marketable securities, and receivables.

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I believe that the answer is B  
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