How Often Does the Basket of Goods in the Consumer

question 87

Multiple Choice

How often does the basket of goods in the consumer price index change?

• A) occasionally, as does the basket of goods used to compute the GDP deflator
• B) yearly, as does the basket of goods used to compute the GDP deflator
• C) occasionally, while the basket of goods used to compute the GDP deflator changes yearly
• D) yearly, while the basket of goods used to compute the GDP deflator changes occasionally

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Definitions:

Recognition Lag

The delay between the time when an economic problem or trend is identified and the time when it is officially recognized.

Discretionary Policy

Economic policies based on the judgment of policymakers rather than set by predefined rules.

Corrective Policy

Corrective Policy refers to government actions taken to fix imperfections in the market, aiming to improve economic efficiency and promote fairness.

Economy

A system by which goods and services are produced, distributed, and consumed within a society or geographical area.