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:

Sub-Saharan Africa

The region of Africa located south of the Sahara Desert, characterized by diverse cultures, languages, and histories.

Dependency Theory

Views economic underdevelopment as the result of exploitative relations between rich and poor countries.

Modernization Theory

Holds that economic underdevelopment results from poor countries lacking Western attributes, including Western values, business practices, levels of investment capital, and stable governments.

Development Theory

An extensive category of theories that seek to explain the processes, strategies, and mechanisms by which societies progress economically, socially, and politically.