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Recall Application 4, "The Introduction of Cell Phones and the Bias

Question 143

Multiple Choice

Recall Application 4, "The Introduction of Cell Phones and the Bias in the CPI," to answer the following questions:
-According to the application, the failure to include cell phones in the calculation of the CPI creates an upward bias on the telecommunications component of the CPI by 0.8 to 1.9 percent. The reason for this upward bias is most likely from


A) the decrease in the price of cell phones.
B) the increase in the price of cell phone calls.
C) the increase in the price of cell phones.
D) B and C are correct.

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