The Consumer Price Index (CPI)

question 139

Multiple Choice

The Consumer Price Index (CPI)

• A) measures the prices of all goods produced in the economy
• B) includes prices of raw materials
• C) is found by averaging the prices of all goods consumed in the economy
• D) includes only the prices of domestically produced consumer goods
• E) includes the prices of some used consumer goods

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Deflation

A sustained decrease in the price level.

Growth

An increase in the economic capacity of a country to produce goods and services, compared from one period of time to another.