Which Statement Is NOT True

question 205

Multiple Choice

Which statement is NOT true?

• A) The consumer price index does not account for product substitutions well.
• B) The consumer price index does not account for all goods and services consumed by households.
• C) The consumer price index is a cost-of-living index.
• D) The consumer price index measures inflation.

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Definitions:

Capital Account

A national account that records transactions involving the purchase and sale of assets, such as property rights and stocks, between residents and non-residents.

Personal Savings Rate

The percentage of personal disposable income that is saved by households rather than spent on consumption.

Current Account Deficit

A current account deficit occurs when a country's total imports of goods, services, and transfers are greater than its total exports, indicating it is spending more on foreign trade than it is earning.

Gold Standard

A monetary system in which a country's currency or paper money has a value directly linked to gold.