The "basket" on which the CPI is based is composed of
A) Consumer production.
B) Products purchased by the typical consumer.
C) Raw materials purchased by firms.
D) Total current production.
E) A selection of consumer goods typically purchased over the last 30 years.

Question

Quizplus · Accepted Answer

The CPI is based on products purchased by the typical consumer, which includes a basket of goods and services such as food, housing, transportation, and medical care. It is designed to measure the changes in the cost of living over time, and therefore includes goods and services that are most commonly purchased by households.

The "Basket" on Which the CPI Is Based Is Composed