The Chained Consumer Price Index (CPI)is a Better Measure of Prices

question 95

Multiple Choice

The chained consumer price index (CPI) is a better measure of prices than the traditional CPI because

• A) it contains producer prices,not just consumer prices.
• B) it adjusts for price changes less frequently but across more goods.
• C) it adjusts for price changes more often,especially when new goods are introduced,which is important because new products' prices tend to fall soon after introduction.
• D) the chained index is called "chained" because it includes industrial goods that are not included in the traditional CPI.
• E) while omitting producer prices,it includes substitution between goods as relative prices change.

---

Definitions:

NSF Check

A check that cannot be processed because the account it is drawn on does not have sufficient funds.

Outstanding Checks

Checks recorded in the checkbook register that have not yet been processed or debited by the banking institution.

Checks Cleared

The process by which banks verify and process the transfer of funds from the check writer's account to the recipient's account.

Bank Reconciliation

Bank reconciliation is the process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure they are in agreement.