I the CPI Is Not Just One Index, but Includes

question 10

Multiple Choice

i. The CPI is not just one index, but includes a large number of groups, subgroups and selected items, such as a food index, a transportation index and a shelter index. ii. The Consumer Price Index is based on more than 600 separate goods and services used by most urban and rural families.
iii. One function of CPI is to allow consumers to determine the degree to which their purchasing power is being eroded by price increases and as such, it is a metre stick for revising wages, pensions and other income payments to keep pace with changes in prices.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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