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QuizMultiple Choice

GDP and Changes in the Price Level

Question 2 • VT-GA-EOC-Personal Finance & Economics A ULHS

The CPI is a price index that can be defined as:

Answer
A
a guide to consumer spending.
B
a statistical series that can be used to measure consumer prices of a market basket of goods over time.
C
an indicator of what firms ought to produce.
D
none of the above.

Explanation

The Consumer Price Index (CPI) tracks changes over time in the prices consumers pay for a market basket of goods and services. So the correct choice is “a statistical series that can be used to measure consumer prices of a market basket of goods over time.” It is not a guide to consumer spending or to what firms ought to produce.

AI-written and checked against the verified answer.

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