The Consumer Price Index (CPI) Is Calculated

question 31

Multiple Choice

The consumer price index (CPI) is calculated

• A) using a fixed basket of goods and, therefore, will tend to understate inflation.
• B) using a fixed basket of goods and, therefore, will tend to overstate inflation.
• C) using a constantly changing basket of goods and, therefore, will tend to understate inflation.
• D) using a constantly changing basket of goods and, therefore, will tend to overstate inflation.