When We Compare the Records of the CPI and the Chain

question 17

Multiple Choice

When we compare the records of the CPI and the chain price index of Household Final Consumption Expenditure (HFCE) over time, the

• A) CPI tends to exceed the chain price index of HFCE.
• B) two are very different in magnitude.
• C) chain price index tends to exceed the CPI.
• D) two measures are identical.
• E) CPI tends to exceed the chain price index when inflation is high, and the chain price index tends to exceed the CPI when inflation is low.

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Definitions:

Net Income

The company's earnings following the deduction of all costs, taxes, and expenses from the overall income.

FVTOCI Investments

Financial assets classified as fair value through other comprehensive income; adjustments to their fair value don't affect profit or loss but other comprehensive income.

IFRS 9

An International Financial Reporting Standard that deals with the accounting for financial instruments, covering the classification, measurement, and recognition of financial assets and liabilities.

Accumulated Other Comprehensive Income

Represents the total of all unrealized gains and losses that are not included in net income but affect shareholders' equity.