The technique currently used to calculate the CPI implicitly assumes that over time consumers buy
A) relatively more of goods whose relative prices are rising.
B) relatively less of goods whose relative prices are rising.
C) the same relative quantities of goods as in a base year.
D) goods and services whose quality improves at the rate of growth of real income.

Question

Quizplus · Accepted Answer

The CPI (Consumer Price Index) calculation assumes that consumers purchase a fixed basket of goods and services, reflecting the same relative quantities as in a base year, without accounting for changes in consumer behavior due to price changes.

The Technique Currently Used to Calculate the CPI Implicitly Assumes