Prices of items included in the CPI are:
A)averaged, with the price of every item weighted equally.
B)weighted according to the amount of the item produced in GDP.
C)weighted according to the quantity of the item purchased by the typical household.
D)chained to the base year by the year-to-year growth rate of the item.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) weights prices according to the quantity of each item purchased by the typical household, reflecting their relative importance in consumer spending.

Prices of Items Included in the CPI Are