1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Tamiku [17]
4 years ago
9

What are the three effects that bias the measurement of CPI

Business
1 answer:
Natalka [10]4 years ago
7 0

Answer: Consumer price index (CPI) is weighted price index of basket of good that a consumer purchases each month. CPI is fixed in nature. It is an economic indicator. A rise in CPI indicates consumer inflation rate. The are type of bias that effects the measurement of CPI are: substitution bias, quality bias and outlet bias.

Explanation: Following are the bias:

  1. <u>Substitution Bias</u>- it arises when prices in the consumer  basket increases and consequently low price alternatives or substitutes are opted by the consumer. As we know CPI is fixed-weight price index so the impact is not predicted accurately.
  2. <u>Quality bias</u>- It arises when any increase in technology increases the quality life of a product. Constant change in the quality of the product again does not reflect in consumer price index.
  3. <u>Outlet bias</u>- consumer shifts to new places or outlets as per their taste and preferences which is again not well represented by the CPI.

You might be interested in
A country’s per capita gdp measures the amount of goods and services created __________.
charle [14.2K]

Answer:

Within a country and divided by the entire population.

Explanation:

GDP per capital is the quantity of goods and services produced in a given country divided by its population. Thus, there is the internal production per person, that is, the amount of goods and services per person that a given economy produces. It is an important indicator of a country's economic development.

4 0
3 years ago
Marina, Inc., acquires 1 million shares of its own $1 par value common stock at $70 per share. It later resells the 1 million sh
Archy [21]

Answer:

c. credit to Additional Paid-in Capital

Explanation:

The journal entry to record the difference is shown below:

Cash A/c Dr $75 million

      To Treasury stock A/c $70 million    (1 million shares × $70 per share)

      To Additional paid in capital - in excess of par $5 million

(Being the issuance of treasury stocks is reported and the amount remaining is credited to the additional paid-in capital account)

3 0
3 years ago
The efficient markets hypothesis holds only if all investors are rational. True or false?
DiKsa [7]

Answer:

This is true, the efficient market hypothesis only holds if all the investors are rational, for example if an investor is not rational and wants to make a loss instead of profit, then the efficient market hypothesis wont hold as the investor will be acting in a way that wont benefit him. When the investor acts irrationally, then he wont react correctly to the information he has and buy or sell stocks which he isn't supposed to buy or sell and this will change the price of the stock from what the price of the stock should be.

Explanation:

5 0
3 years ago
An asset is acquired using a noninterest-bearing note payable for $100,000 due in two years. Management records the purchase wit
TiliK225 [7]

Answer:

The answer is A. Management has properly recorded the transaction.

Explanation:

According to the given data Since the note is non interest bearing, no interest will be paid on the bond.

Therefore, asset will be debited and note payable will be credited by the full amount.

Therefore, the Management has properly recorded the transaction.

The joural entry would be as follows:

                        Debit            Credit

asset              $100,000

note payable                    $100,000

6 0
3 years ago
One reason that a common-sized statement is a useful tool in financial analysis is that it enables the user to do what?
Nonamiya [84]

Answer:

It helps to compare two companies in the same industry.

Explanation:

A common-size statement is a critical tool in the financial analysis, as it helps to compare two companies with different size. It is a type of income statement where every feature is represented in the percentage, which helps to compare two companies effectively. Overall, it is an important indicator to measure strength and weakness in a company.

6 0
3 years ago
Other questions:
  • N increase in buyers' income in the market for radios will _______ the market price and ________ the market quantity of radios,
    8·1 answer
  • These are selected 2017 transactions for Wyle Corporation: Jan. 1 Purchased a copyright for $120,000. The copyright has a useful
    7·1 answer
  • Barney extends his lunch break beyond the allotted time. Wilma uses the office telephone for unauthorized personal phone calls.
    9·2 answers
  • The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its varia
    5·1 answer
  • When the money market is drawn with the value of money on the vertical axis, the price level increases if Group of answer choice
    9·1 answer
  • Suppose a 15 to 18-year-old male from Chile was 176 cm tall from 2009 to 2010. The z-score when x = 176 cm is z = _______. This
    14·1 answer
  • At what amount is a short-term notes receivable recorded on the issue date?
    13·1 answer
  • The Federal Reserve manages the nation’s currency and money supply by
    5·1 answer
  • How you will differentiate the company from
    5·1 answer
  • Advertising, engineering, marketing, product design, and web design are all examples ____ of work.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!