One Way the Consumer Price Index (CPI) Differs from the GDP

question 45

Multiple Choice

One way the consumer price index (CPI) differs from the GDP chain price index is that the CPI:

• A) uses current year quantities of goods and services.
• B) includes separate market baskets of goods and services for both base and current years.
• C) includes only goods and services bought by typical urban consumers.
• D) is bias free.

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Definitions:

Accounts Payable

Liabilities representing amounts a company owes to creditors for goods and services purchased on credit and not yet paid.

Average Days

A measure that typically refers to the average number of days an asset is held or the average number of days it takes for a company to convert certain assets into cash.

Sell Inventory

The process of selling goods that are held for sale in the ordinary course of business, turning inventory into revenue.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.