The Calculation of the GDP Chain Price Index Differs from the Calculation

question 79

Multiple Choice

The calculation of the GDP chain price index differs from the calculation of the CPI in which of the following ways?

• A) The CPI measures the price changes for all goods and services, whereas the GDP chain price index only looks at certain goods and services.
• B) The GDP chain price index measures the price changes for all goods and services, whereas the CPI only looks at certain goods and services.
• C) The CPI is a percentage, whereas the GDP chain price index method is an index.
• D) The CPI measures only consumer prices, whereas the GDP chain price index measures producer prices.

---

Definitions:

Cost Function

A mathematical expression that describes how the costs incurred by a firm or individual vary with the level of activity or output.

Market Demand

The total quantity of a good or service that all consumers in a market are willing to purchase at different prices.

Cartel

An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

Demand Curve

A visual illustration that shows how the amount of a product consumers want to buy varies with changes in its price.