Which of the Following Is the Major Difference Between the Chained

question 14

Multiple Choice

Which of the following is the major difference between the chained consumer price index and the regular consumer price index?

• A) The chained index assumes that households purchase the same bundle of goods over a lengthy time period; the regular price index makes allowance for shifts away from goods that have become more expensive.
• B) The chained index makes allowance each month for shifts away from goods that have become more expensive; the regular consumer price index fails to adjust for these shifts.
• C) The chained consumer price index reflects changes in the prices of all final goods and services produced during a period, whereas the regular consumer price index reflects only changes in the prices of goods purchased by households.
• D) The chained consumer price index will generally result in a higher measured rate of inflation than the regular consumer price index.

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