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Author Question: Why does the substitution bias cause the consumer price index to overstate inflation and the cost of ... (Read 90 times)

kfurse

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on: Mar 16, 2019

Question 1

Figure 9-1











Refer to Figure 9-1. Based on the graph of the labor market above, if a minimum wage is set at $5 per hour, which of the following will occur?


◦ The unemployment rate will rise.
◦ The unemployment rate will fall.
◦ The level of unemployment will rise, but the percentage of the labor force unemployed will not change.
◦ None of these will occur.

Question 2

Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?

Macroeconomics ¦ Hubbard, O'Brien ¦ 6th Edition
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Marked as best answer by kfurse on Mar 16, 2019

BUTTHOL369

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Reply #1 on: Mar 16, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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kfurse

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Reply 2 on: Mar 16, 2019
YES! Correct, THANKS for helping me on my review

Jossy

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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