The Consumer Price Index (CPI)

question 101

Multiple Choice

The Consumer Price Index (CPI) :

• A) tends to understate the impact of price changes.
• B) tends to overstate the impact of price changes due to substitution bias.
• C) is more accurate than the GDP deflator.
• D) assumes that consumers substitute away from cheaper goods.

Understand the concept and importance of relevant information in accounting decision-making.

Comprehend the principles of differential analysis and its advantages in decision-making.

Recognize the criteria for measuring objectives in quantitative terms in decision-making.

Distinguish between objectives, constraints, and opportunity costs in conflict resolution during decision-making.

---

Definitions:

Retrograde Amnesia

A loss of memory accessing information that was acquired before a particular date, usually the date of an injury or operation.

Retroactive Amnesia

A type of amnesia where individuals have difficulty recalling events that occurred before a specific point in time, often due to trauma or disease.

Proactive Amnesia

An error, possibly meant to be "Proactive Amnesia" refers to NO.

Implicit Memory

A type of long-term memory that influences thoughts and behaviors without conscious awareness.