Why Don't Economists Simply Average the Price Changes of All

question 33

Multiple Choice

Why don't economists simply average the price changes of all goods in the market basket to calculate changes in the price level?

• A) Consumers typically don't buy the same amount of each good in the basket.
• B) The median would be a more accurate measure.
• C) More expensive items should carry greater weight.
• D) The market basket isn't representative of all goods in the economy.

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Definitions:

Sales Commissions

Fees paid to salespersons for selling products or services, often a percentage of the sale amount.

Shipping Expenses

Costs incurred by a company to transport its products to customers, often classified as part of operating expenses.

Sales Manager's Salary

The compensation paid to the individual responsible for directing and managing a company's sales team and strategies.

Flexible Budget

A financial planning tool that can be modified based on actual operating figures, providing a more relevant comparison of actual to budgeted performance.