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How Are the Weights on the Various Goods and Services

Question 2

Multiple Choice

How are the weights on the various goods and services in the CPI basket determined?


A) Each good and service is weighted according to its quantity.
B) A survey is conducted to determine how much of each good and service typical consumers purchase.
C) The weights equal the ratio of expenditures on each good or service divided by the total consumption expenditures in the GDP accounts.
D) Each good and service is weighted according to its price.

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