Which of the Following Is a Deficiency of the Regular

question 45

Multiple Choice

Which of the following is a deficiency of the regular (or traditional) consumer price index  (CPI) as a measure of the cost of living?

• A) The CPI fails to make any adjustment for changes in the price of housing.
• B) The CPI only measures changes in the prices of food, clothing, and energy.
• C) The CPI fails to maintain the quantities of the typical bundle of goods purchased by consumers constant over a lengthy time frame.
• D) The CPI does not adjust regularly for the fact that consumers will shift their spending away from goods that become more expensive.

---

Definitions:

Power Distance

The extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally.

Individualism

A social theory favoring freedom of action for individuals over collective or state control.

Collectivism

A cultural orientation where people prioritize the goals and interests of the group over individual achievement.

Exporting

The process of sending goods or services produced in one country to another country for sale or trade.