Which of These Events Would Cause the Consumer Price Index

question 57

Multiple Choice

Which of these events would cause the consumer price index to overstate the increase in the cost of living?

• A)Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price.
• B)Energy prices decrease,and consumers respond by buying more gas and electricity.
• C)A new good is introduced that renders cellular telephones inferior and obsolete.
• D)All of the above are correct.

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Definitions:

Percentage Change

The measure of the degree of change over time and is used to express the relative difference between two numbers as a percentage.

Financial Statements

Documents presenting a detailed summary of a corporation's financial health, which encompasses the income statement, balance sheet, and cash flow statement.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of shareholders.

Long-Term Liabilities

Obligations or debts that a company expects to pay after one year or beyond the current business cycle.