The Consumer Price Index (CPI)

question 105

Multiple Choice

The consumer price index (CPI) :

• A)is an average of the prices of all consumer goods purchased each year.
• B)measures changes in the prices of a market basket of some 600 goods and services purchased by urban consumers.
• C)measures prices of goods, but not services since services don't fit into a market basket.
• D)is also known as the GDP price index.

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Definitions:

Relevant Information

Relevant information comprises data that is applicable and helpful in making decisions, particularly in the context of financial and managerial accounting.

Qualitative Characteristic

Attributes that make the information provided in financial statements useful to users, including relevance, understandability, comparability, and reliability.

Cost Constraint

The principle that the cost of providing financial information should not outweigh the benefits that the information provides to users.