How is the basket of goods in the CPI determined?
A)The basket is a random sample of goods and services purchased by consumers.
B)The basket is representative of all the goods and services that make up GDP.
C)Statistics Canada surveys consumers and finds the basket of goods and services that the typical consumer buys.
D)A basket of raw materials and unfinished goods purchased by typical producers is selected by Statistics Canada based upon surveys of manufacturers.

Question

Quizplus · Accepted Answer

Statistics Canada surveys consumers to determine the basket of goods and services that the typical consumer buys. This basket is then used to calculate the Consumer Price Index (CPI) which measures the rate of inflation. The items in the basket are chosen based on their frequency of purchase and their importance in the average Canadian household's budget.

How Is the Basket of Goods in the CPI Determined