Which of the Following Is True of the Chained Consumer

question 163

Multiple Choice

Which of the following is true of the chained consumer price index?

• A) It will generally result in a slightly lower figure for the measured annual rate of inflation than the regular consumer price index.
• B) It makes no allowance for shifts away from goods and services as they become more expensive.
• C) It considers only changes in the prices of household necessities such as food and clothing.
• D) It holds the quantities of the goods and services used to calculate the index constant over lengthy time periods.

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Definitions:

Barrier to Entry

Factors that prevent or hinder companies from entering a particular market, which might include high startup costs, strict regulations, or strong competition.

Pricing Strategy

A plan or approach used by businesses to set the prices for their products or services based on various factors like market demand, competition, and cost of production.

Socially Optimal Price

The price of a product that results in the most efficient allocation of an economy’s resources and that is equal to the marginal cost of the product.

Unregulated Monopoly

A market structure in which a single supplier dominates the market without any government intervention or regulation.