Which of the Following Is True About the Consumer Price

question 92

Multiple Choice

Which of the following is true about the consumer price index?

• A)It accounts for people switching to goods whose prices have fallen.
• B)It assumes that consumers purchase the same amount of each product in the market basket each month.
• C)It frequently updates the price changes of new products added to the market basket,as these have a tendency to fall.
• D)It filters out the part of price increases that occurs because of quality improvements in products.

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Definitions:

Expected Rate of Return

The anticipated return on an investment, calculated as the average of probable returns weighted by their likelihood.

CSCO

An abbreviation for Cisco Systems, Inc., a multinational technology conglomerate known for its networking hardware, software, and telecommunications equipment.

IRR Method

The Internal Rate of Return method, a capital budgeting technique used to evaluate and compare the profitability of investments or projects.

Hurdle Rate

The minimum rate of return on an investment required by a manager or investor.