Which of the Following Is a Reason Why the Consumer

question 116

Multiple Choice

Which of the following is a reason why the Consumer Price Index (CPI) is not calculated as a simple average of all prices?

• A) Some goods experience large price changes and the CPI would be too variable if computed by a simple average.
• B) Goods differ in their importance in the average consumer's budget.
• C) Some goods never experience price changes and the CPI would not be variable enough if computed as a simple average.
• D) It would be difficult to compute a price index using a simple average of all prices.
• E) Actually,the CPI is a simple average of all prices.

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Definitions:

Sensorimotor Stage

The first stage in Piaget's theory of cognitive development, involving infants learning through sensory experiences and motor actions.

Concrete Operational Stage

A phase in Jean Piaget's theory of cognitive development, occurring from around 7 to 12 years old, where children gain the ability to think logically about concrete events.

Preoperational Stage

The preoperational stage is a concept in Piaget's theory of cognitive development, describing a stage (roughly ages 2-7) where children begin to use language and think symbolically, but their thinking is still intuitive and egocentric.

Formal Operational Stage

The final stage of Piaget's theory of cognitive development, where individuals aged 12 and above gain the ability to think abstractly, logically, and systematically.