For the Purpose of Measuring the Cost of Living for Consumers

question 37

Multiple Choice

For the purpose of measuring the cost of living for consumers, one reason the GDP price index is
NOT a good substitute for the CPI is because the GDP price index

• A)and the CPI move in the same direction over time.
• B)includes the prices of exported goods, which are not consumed in the United States.
• C)compares a current year basket of goods with a base year basket of goods.
• D)compares current year's prices with base year's prices.
• E)has a larger bias than does the CPI.

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