How does the consumer price index (CPI) differ from the personal consumption expenditure (PCE) index?
A) CPI data is collected quarterly, and PCE data is collected annually.
B) PCE data is adjusted for price changes, and; CPI data is not adjusted for price changes.
C) The CPI includes services in its market basket, and the PCE does not include services.
D) The PCE is chain-weighted, and the CPI has a fixed market basket.

Question

Quizplus · Accepted Answer

The PCE index is chain-weighted, meaning it adjusts the weighting of goods and services over time to reflect changing consumer behavior, whereas the CPI uses a fixed market basket based on a base period, not adjusting the weight of goods and services as consumer preferences change.

How Does the Consumer Price Index (CPI) Differ from the Personal