Which of the Following Statements Is FALSE

question 78

Multiple Choice

Which of the following statements is FALSE?

• A)One problem with any fixed-bundle index as a measure of the cost of living is that it does not account for substitutions that consumers might make in response to price changes.
• B)The producer price index is considered to be a leading indicator of future inflation rates.
• C)The best overall indicator of inflationary pressures in the economy is the GDP deflator.
• D)The consumer price index somewhat understates changes in the cost of living.

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