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Over a number of years, the country of Zanzibar has experienced a halt in its technological growth and innovation, though prices have continued to rise. Which CPI bias problem is likely to persist in this scenario

Respuesta :

The CPI bias problem faced in the given scenario is called as Substitution bias CPI.

What do you mean by Substitution bias CPI?

Substitution bias refers to the bias that arises when purchasers change their purchasing conduct in reaction to relative price changes.

Economic concept predicts that an increase in a good's price will cause purchasers to lessen their purchases of that good and rather buy an alternative with an enormously decrease fee.

For example, if a freeze in Florida causes the price of oranges to skyrocket, purchasers might also additionally substitute Texas grapefruits for Florida oranges.

hence, The CPI bias problem faced in the given scenario is called as Substitution bias CPI.

learn more about Substitution bias CPI:

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