Both the CPI and the Chain Index for GDP Overstate

question 170

Multiple Choice

Both the CPI and the chain index for GDP overstate actual changes in cost of living due to:

• A) the income effect.
• B) the difficulty of keeping track of the price of imports.
• C) the difficulty of measuring quality improvements.
• D) the difficulty of keeping track of changing consumer preferences.

---

Definitions:

Critical Numbers

Critical numbers of a function are values of the variable at which the derivative of the function is 0 or undefined.

Horizontal Distance

Represents the straight-line distance between two points on a plane, measured along a line parallel to the horizontal axis.

Ground

Often refers to the reference point in an electrical circuit from which voltages are measured, a common return path for electric current, or a direct physical connection to the Earth.

Perimeter

The total distance around the edge of a geometric figure or shape.