Asked by Taylor Brazeau on May 26, 2024
Verified
The consumer price index measures:
A) the cost of all goods and services produced in the U.S.economy.
B) the average change over time in the selling prices received by domestic producers for their output.
C) the cost of a fixed market basket of consumer goods and services produced in the U.S.economy.
D) the ratio of an economy's nominal GDP to its real GDP.
E) the income distribution of an economy.
Market Basket
A selected set of goods and services used to track changes in prices and measure inflation over time; represents the typical consumption of a household.
Consumer Price Index
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
Nominal GDP
The aggregate price of every ultimate good and service generated within a nation over a certain period, valued in the current monetary rates without modifications for inflationary changes.
- Comprehend the concept and quantification of inflation using different indices such as the Consumer Price Index (CPI).
Verified Answer
GS
Ghadeer SalehMay 28, 2024
Final Answer :
C
Explanation :
The consumer price index (CPI) measures the cost of a fixed market basket of consumer goods and services produced in the U.S. economy. It tracks changes in the prices of goods and services that an average urban household purchases, including food, clothing, housing, transportation, medical care, recreation, and education. The CPI is used to measure inflation, which is the rate of increase in the price level of goods and services in an economy over a period of time.
Learning Objectives
- Comprehend the concept and quantification of inflation using different indices such as the Consumer Price Index (CPI).