In the CPI, how are goods and services weighted?
A) according to how much consumers buy of each item
B) according to whether the goods and services are necessities or luxuries
C) according to the levels of production of the goods and services in the domestic economy
D) according to the expenditures on them in the GDP national income accounts

Question

Quizplus · Accepted Answer

Goods and services are weighted in the CPI according to how much consumers buy of each item. This is known as the expenditure approach, and it reflects the consumption patterns of households in the economy.

In the CPI, How Are Goods and Services Weighted