The Chained Consumer Price Index (CPI)tends to Be

question 140

Multiple Choice

The chained consumer price index (CPI) tends to be

• A) a better measure of prices than the traditional CPI,no matter what the circumstances.
• B) a better measure of prices than the traditional CPI,but only if inflation is relatively high.
• C) a better measure of prices than the traditional CPI,but only if inflation is relatively low.
• D) equally as good as the traditional CPI,under all conditions.
• E) a poor measure of prices but better than the gross domestic product (GDP)deflator.

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Definitions:

Price-Support Program

Government policies designed to maintain the price of a commodity at a certain level through subsidies or purchase of the market surplus.

Price Supports

Government interventions to maintain the market price of a commodity at a certain level to protect producers from market fluctuations.

Price Floor

A government or regulatory-imposed minimum price for a commodity or service, intended to prevent the market price from falling below a certain level.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity, usually intended to protect consumers.