Which of the Following Statements Is True

question 70

Multiple Choice

Which of the following statements is true?

• A)The CPI is based on a fixed quantity of goods and services in the base year.
• B)The CPI measures the price of all goods and services included in GDP.
• C)Services are excluded from the CPI.
• D)The CPI is a by-product of computing GDP.
• E)The CPI does not hold the quantity of goods and services constant when computing the price level.

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Definitions:

Bonds Retired

The act of paying off or buying back issued bonds before their maturity date.

Machinery

Industrial or commercial devices or equipment designed to perform specific tasks, often contributing to the production of goods.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.

Current Assets

Assets that are expected to be converted into cash, sold or consumed within one year or the operating cycle, whichever is longer.