The base period for CPI calculations is generally 1982-84. In ...

[sheilaspns]

The base period for CPI calculations is generally 1982-84. In 2005, 50 of households accessed the Internet through a broadband connection that would not have existed in the 1980s.
 
  This potential for bias in the CPI is referred to as ________ bias and results in ________.
  A) outlet; the CPI overestimating the true change in the cost of living
  B) outlet; the CPI underestimating the true change in the cost of living
  C) new product; the CPI overestimating the true change in the cost of living
  D) net product; the CPI underestimating the true change in the cost of living

Question 2

Suppose you withdraw 1,000 from your savings account and put it in your checking account. Briefly explain how this will affect M1 and M2.
 
  What will be an ideal response?

[rosiehomeworddo]

Answer to Question 1

C

Answer to Question 2

M2 will not change and M1 will rise by 1,000. Going from a savings account to checking account would raise M1, but both are part of M2, so M2 would not change.

[sheilaspns]

Thank you

[rosiehomeworddo]

Happy to help you