Which of the Following Is True About the Consumer Price

question 92

Multiple Choice

Which of the following is true about the consumer price index?

• A)It accounts for people switching to goods whose prices have fallen.
• B)It assumes that consumers purchase the same amount of each product in the market basket each month.
• C)It frequently updates the price changes of new products added to the market basket,as these have a tendency to fall.
• D)It filters out the part of price increases that occurs because of quality improvements in products.

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Definitions:

Simple Interest

Interest calculated on the principal sum only, not compounding on earned interest, typically over a period of time.

Savings Account

A bank account that earns interest over time, designed for the deposit of funds not intended for immediate use.

Discounted

The reduction applied to the face value or current price of an item or financial instrument, taking into account factors such as time, interest rate, and risk.

Rate of Return

The profit or deficit from an investment during a certain timeframe, represented as a portion of the investment's starting price in percentage terms.