What Does the CPI Measure

question 146

Multiple Choice

What does the CPI measure?

• A) the overall price of inputs purchased by a typical producer
• B) the overall price of goods and services bought by a typical consumer
• C) the overall price of goods and services produced in the economy
• D) the overall price of shares on the Toronto Stock Exchange

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Definitions:

Public Good

Goods or services made available to all individuals within a society free of charge, supplied by the government or by private non-profit entities.

Private Good

A good or service that is individually consumed and that can be profitably provided by privately owned firms because they can exclude nonpayers from receiving the benefits.

Nonpayers

Individuals who benefit from goods or services without directly contributing to the cost, often associated with public goods.

Nonexcludability

is a characteristic of public goods where it is impossible to prevent individuals from enjoying the benefits of a good or service, regardless of whether they have paid for it.