What is the basket of goods used to construct the CPI?
A) a random sample of all goods and services produced in the economy
B) the goods and services typically bought by consumers, according to Statistics Canada surveys
C) goods and services weighted by the ratio of expenditures on them relative to the consumption component of GDP
D) the average price of goods and services in each major category of consumer expenditures

Question

Quizplus · Accepted Answer

The basket of goods used to construct the Consumer Price Index (CPI) is based on the goods and services that are typically bought by consumers, as determined by surveys conducted by national statistical agencies like Statistics Canada. This approach ensures that the CPI reflects the spending patterns of the average consumer.

What Is the Basket of Goods Used to Construct the CPI