One way the consumer price index (CPI) differs from the GDP chain price index is that the CPI:
A) uses current year quantities of goods and services.
B) includes separate market baskets of goods and services for both base and current years.
C) includes only goods and services bought by typical urban consumers.
D) is bias free.

Question

Quizplus · Accepted Answer

The CPI only includes goods and services bought by typical urban consumers, while the GDP chain price index includes all goods and services produced within a country's borders, regardless of who buys them. Therefore, choice C is correct. Choices A, B, and D are incorrect because they do not accurately describe how the CPI differs from the GDP chain price index.

One Way the Consumer Price Index (CPI) Differs from the GDP