Which of the Following Statements Is True of the CPI

question 118

Multiple Choice

Which of the following statements is true of the CPI?

• A) It uses the same basket of goods and services as the PPI.
• B) The quantities of items in the current year are used for computing the weights for the index.
• C) It is an unweighted price index used to measure inflation.
• D) It is based on the prices paid by urban consumers for a representative basket of goods and services.

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Definitions:

Hourly Wage Rate

The amount of money paid for each hour of work.

Production Technology

Refers to the methods and processes used by businesses to manufacture goods and provide services.

Total Revenue

The overall amount of money generated by a firm from selling its goods and services, calculated as the unit price multiplied by the quantity sold.

Firms

Business organizations or entities that sell goods or services, usually in pursuit of profit.