If We Compare the CPI to a Perfect Cost of Living

question 24

Multiple Choice

If we compare the CPI to a perfect cost of living index, we find that they are

• A) the same thing.
• B) different because the CPI uses a fixed basket and has some measurement difficulties.
• C) different because the cost of living has nothing to do with prices.
• D) different because the CPI does not measure prices.
• E) not the same because the CPI has a fixed reference base period.

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Definitions:

Operation Bootstrap

An economic development program initiated in Puerto Rico in the late 1940s to transform the economy from agriculture-based to industrial.

Puerto Rican Economy

Refers to the economic structure, dynamics, and trends of Puerto Rico, a territory of the United States, which includes industries such as manufacturing, services, and tourism.

Mexicans

Referring to the people of Mexico or persons of Mexican descent, their culture, or nationality.

Large-Scale Entry

Refers to entering or participating in a market or industry on a extensive scale, typically implying significant resources or capacity.