Because the CPI Is Based on a Fixed Basket of Goods

question 82

Multiple Choice

Because the CPI is based on a fixed basket of goods, the introduction of new goods and services in the economy causes the CPI to overestimate the cost of living. Why is this?

• A)because new goods and services are always of higher quality than existing goods and services
• B)because new goods and services cost less than existing goods and services
• C)because new goods and services cost more than existing goods and services
• D)because when a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living

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Port 21

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DNS Server

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IP Address

Internet Protocol Address, a unique string of numbers and periods that identifies each computer communicating over a network.

Web Server

A computer configured to provide web-based content that is accessed through a web browser.