If people bought the same market basket of goods as the average consumer again and again the
A) consumer price index (CPI)would be extremely accurate.
B) consumer price index (CPI)would be less accurate.
C) gross domestic product (GDP)deflator would be more accurate.
D) gross domestic product (GDP)deflator would be less accurate.
E) consumer price index (CPI)would be biased upward relative to the GDP deflator.

Question

Quizplus · Accepted Answer

If people bought the same market basket of goods as the average consumer again and again, the weights assigned to different goods in the consumer price index (CPI) would accurately reflect the relative importance of those goods in the average consumer's spending. This would result in an extremely accurate CPI.

If People Bought the Same Market Basket of Goods as the Average