12
QuizMultiple Choice

Macroeconomics — Test

Question 12 • Economics

Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States?

Answer
A
Americans purchase many more boxes of tomatoes than barrels of gasoline.
B
Gasoline costs more to produce and purchase than tomatoes.
C
Americans spend more money on gasoline than tomatoes, on average.
D
Gasoline is imported from other nations at a higher rate than tomatoes.

Explanation

The inflation rate uses a weighted basket of goods and services based on how much households spend on them. Since Americans spend more money on gasoline than on tomatoes on average, changes in gasoline prices have a larger effect on the overall rate. That is why choice A is correct; the weight is not determined simply by how expensive an item is to produce.

AI-written and checked against the verified answer.

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