In 1986,an Apple IIe computer with 65 kilobytes of memory cost around $1,500.Today,a $1,500 iMac computer (also made by Apple)comes with 8 gigabytes of memory.This illustrates the potential for what kind of bias in CPI calculations?
A)new product bias
B)increase in quality bias
C)substitution bias
D)outlet bias

Question

Quizplus · Accepted Answer

The increase in memory from 65 kilobytes to 8 gigabytes represents an increase in quality bias. The CPI may not fully account for this increase in quality, which can result in an overestimation of inflation.

In 1986,an Apple IIe Computer with 65 Kilobytes of Memory