Which of the Following Statements Is True

question 218

Multiple Choice

Which of the following statements is true?

• A) One benefit with any fixed-bundle index as a measure of the cost of living is that it does not account for substitutions that consumers might make in response to price changes.
• B) The producer price index is considered to be a leading indicator of future inflation rates.
• C) The best overall indicator of inflationary pressures in the economy is the CPI.
• D) The consumer price index somewhat understates changes in the cost of living.

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