One Improvement of the Chained Consumer Price Index (CPI) Over

question 95

Multiple Choice

One improvement of the chained consumer price index (CPI) over the traditional CPI is that:

• A) the chained CPI more quickly takes into account new goods.
• B) the chained CPI accounts for substitution between goods.
• C) the chained CPI is "progressive," whereas the traditional CPI is "regressive."
• D) the traditional CPI measures Engle's law but ignores the Paasche effect, which is included in the chained CPI.
• E) The chained CPI more easily accounts for deflation.

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