One of the Widely Acknowledged Problems with Using the Consumer

question 153

Multiple Choice

One of the widely acknowledged problems with using the consumer price index as a measure of the cost of living is that the CPI

• A)fails to measure all changes in the quality of goods.
• B)displays a housing bias.
• C)accounts for changes in prices of some goods,but prices of certain goods are assumed to remain constant.
• D)All of the above are correct.

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Definitions:

7% Less

A reduction by seven percent from a previous amount or value.

Standard & Poor's 500

An American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

Stock Index

A statistical measure that shows changes in the stock market by tracking selected stocks' prices.

Price Appreciation

The increase in value of an asset or investment over time.