In the CPI, Goods and Services Are Weighted According to

question 174

Multiple Choice

In the CPI, goods and services are weighted according to

• A)how long a market has existed for each good or service.
• B)the extent to which each good or service is regarded by the government as a necessity.
• C)how much consumers buy of each good or service.
• D)the number of firms that produce and sell each good or service.

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Definitions:

Equal Magnitude

A term used to describe quantities or values that are the same in size, amount, or degree.

Pure Yield Pickup Swap

A strategy where an investor moves into higher-yielding securities, trading off shorter-duration or lower-quality bonds for higher yield, assuming additional risk.

Longer-Duration Bonds

Fixed-income securities with extended time frames to maturity, typically exposing investors to higher interest rate risk but potentially offering higher yields.

Shorter-Duration Bonds

Bonds with a near-term maturity date, typically less sensitive to interest rate changes and offering less yield compared to longer-duration bonds.