Question

An example of the new goods bias in the CPI is the Group of answer choices decreasing popularity of SUVs as the price of gasoline has risen. introduction of hybrid automobiles, vehicles that were not made until recently. introduction of higher quality brakes as standard equipment on new cars. switch from traditional car dealerships to low-cost Internet car buying services.

Answer 1

Option B. Introduction of hybrid automobiles, vehicles that were not made until recently.

Step-by-step explanation:

New product bias — within the context of price indices — refers to the to not include products into the Consumer Price Index, because the products have just been newly introduced into the economy. The reason for this is because the CPI fixed basket includes commonly used goods and services.

Therefore, there will be a new goods bias when there is an introduction of recently made hybrid automobiles which are new to the economy.