If We Compare the CPI to a Perfect Cost of Living

question 56

Multiple Choice

If we compare the CPI to a perfect cost of living index,we find that they are

• A)the same thing.
• B)different because the cost of living has nothing to do with prices.
• C)different because the CPI does not measure prices.
• D)different because the CPI uses a fixed basket and has some measurement difficulties.
• E)not the same because the CPI has a fixed reference base period.

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