Asked by Emily Calabrese on Jun 03, 2024
Verified
In the CPI, goods and services are weighted according to
A) how long a market has existed for each good or service.
B) the extent to which each good or service is regarded by the government as a necessity.
C) how much consumers buy of each good or service.
D) the number of firms that produce and sell each good or service.
CPI
The Consumer Price Index reflects the weighted average price changes in a variety of consumer goods and services, such as medical services, food, and transportation.
Goods and Services
Physical products (goods) and intangible assistance or benefits (services) produced to satisfy the wants and needs of consumers.
- Comprehend the determinants affecting variations in the Consumer Price Index (CPI) and their effects on the standard of living.
Verified Answer
EB
Edward BishopJun 07, 2024
Final Answer :
C
Explanation :
In the Consumer Price Index (CPI), goods and services are weighted according to how much consumers buy of each good or service. This approach ensures that the index accurately reflects the spending patterns of the average consumer and the impact of price changes on the cost of living.
Learning Objectives
- Comprehend the determinants affecting variations in the Consumer Price Index (CPI) and their effects on the standard of living.