The CPI Is More Commonly Used as a Gauge of Inflation

question 1

Multiple Choice

The CPI is more commonly used as a gauge of inflation than the GDP deflator is because

• A)the CPI is easier to measure.
• B)the CPI is calculated more often than the GDP deflator is.
• C)the CPI better reflects the goods and services bought by consumers.
• D)the GDP deflator cannot be used to gauge inflation.

---

Definitions:

Commercial Banks

Financial institutions that provide various financial services, including accepting deposits, offering business and personal loans, and other investment products.

Security Selection

The process of choosing individual securities for investment with the aim of achieving a portfolio's investment goals.

Investment Portfolio

An assortment of monetary assets, including shares, bonds, commodities, money, and near-money instruments such as mutual funds and exchange-traded funds (ETFs).

Asset Classes

Categories of assets with similar characteristics and behavior in the marketplace, such as stocks, bonds, real estate, and cash.