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Why does a price index based on constant weights tend to overstate inflation in periods after the base year when the price of one good is rising quickly compared to other goods?
Because people tend to buy cheaper substitutes instead of the good whose price is quickly increasing. But the constant-weight index includes the similar quantities of the expensive goods.
What is the importance of microeconomics in study of managerial economics? Normal 0 false false false EN-IN X-NONE X-NONE
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