Which of the following is true about the consumer price index?
A) It is updated continuously to account for the introduction of new goods.
B) It accounts for people switching away from goods whose prices have risen.
C) It assumes that consumers purchase the same quantity of each product in the market basket each month.
D) It accurately reflects quality changes in goods and services over time.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) assumes a fixed basket of goods and services, meaning it does not account for changes in consumer purchasing habits or quality changes over time.

Which of the Following Is True About the Consumer Price