The Chain-Weighted Index for GDP and the CPI Differ in That

question 21

Multiple Choice

The chain-weighted index for GDP and the CPI differ in that the CPI

• A) excludes price changes from used and imported goods while the chain-weighted index includes these price changes.
• B) asks how much a fixed basket of goods costs in the current year as compared to the cost of those same goods in a base year while the chain-weighted index takes an average of price changes using base years from neighboring years.
• C) is calculated by the Commerce Department while the chain-weighted index is calculated by local newspapers.
• D) is calculated in nominal terms and the chain-weighted index is calculated in real terms.

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Definitions:

Metric Equivalent

A measurement converted into the metric system, which is based on meters, liters, and grams.

Milliliter

A unit of volume in the metric system, equal to one thousandth of a liter, commonly used to measure liquids.

Metric Equivalent

A conversion of measurements into the metric system, which is based on units of ten.

Milliliters

A metric unit of volume equal to one cubic centimeter, used commonly in liquid measurement.