Which of the Following Statements Is False

question 267

Multiple Choice

Which of the following statements is false?

• A) One problem with any fixed-bundle index as a measure of the cost of living is that it does not account for substitutions that consumers might make in response to price changes.
• B) The producer price index is considered to be a leading indicator of future inflation rates.
• C) The best overall indicator of inflationary pressures in the economy is the GDP deflator.
• D) The consumer price index somewhat understates changes in the cost of living.

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Definitions:

Capital Contributions

Financial contributions made by owners or shareholders to increase a company's equity.

Income Distribution

The process of dividing earnings, often in the form of dividends, to shareholders based on the number of shares they own.

Net Income

The total earnings of a company after accounting for all expenses, taxes, and costs, indicating the company's profit.

Personal Use

The use of a product or service for private, non-commercial purposes.