Question

question 21 · 1 point
gold coins are commodity money because
select the correct answer below:
○ they are valuable
○ they have an intrinsic value as precious metal in addition to being valuable as money
○ they are exchangeable for dollars
○ they are universally accepted around the world
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question 22 · 1 point
______ means the rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer’s true cost of living because it does not take into account that the person can substitute away from goods whose relative prices have risen.
select the correct answer below:
○ quality/new goods bias
○ substitution bias
○ hindsight bias
○ omission bias

Explanation:

Question 21

Commodity money has intrinsic value (value in itself, like gold as a precious metal) plus value as money. "They are valuable" is too vague. Exchangeability for dollars or universal acceptance don't define commodity money (e.g., fiat money can be accepted/exchangeable too). The key is intrinsic value as a commodity + monetary value.

Substitution bias in CPI (Consumer Price Index) occurs because a fixed basket ignores that consumers substitute cheaper goods for more expensive ones when prices change, so the CPI overstates cost of living. Quality/new goods bias is about new products or quality changes. Hindsight/omission biases are unrelated to CPI.

Answer:

B. they have an intrinsic value as precious metal in addition to being valuable as money

Question 22