2. For each of the following events, explain how the use of a 10-year-old market basket would...

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2. For each of the following events, explain how the use of a 10-year-old market basket would bias measurements of price changes over the past decade.

a. A typical family owns more cars than it would have a decade ago. Over that time, the average price of a car has increased more than the average prices of other goods.

b. Virtually no households had Internet access a decade ago. Now many households have it, and the price has been falling.

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Macroeconomics In Modules

ISBN: 978-1464139055

3rd Edition

Authors: Paul Krugman ,Robin Wells

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