Which of the following price indices comes closest to measuring the cost of living of the typical household?
A)GDP deflator
B)producer price index
C)consumer price index
D)household price index
E)house price index

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) measures the average change over time in prices paid by urban consumers for a market basket of consumer goods and services. It is often used as a measure of inflation and comes closest to measuring the cost of living of the typical household because it includes items that are typically purchased by households, such as food, housing, clothing, and transportation. The other options, such as the GDP deflator, producer price index, household price index, and house price index do not capture the same range of consumer goods and services and therefore are not as good of a measure of the cost of living for the typical household.

Which of the Following Price Indices Comes Closest to Measuring