An advantage of the personal consumption expenditures price index (PCE)over the Consumer Price Index (CPI)as a measure of inflation is that the PCE
A)includes the prices of more consumer goods and services.
B)includes the prices of consumer goods,but not consumer services.
C)includes the prices of consumer services,but not consumer goods.
D)is a fixed market-basket price index that does not allow the mix of products to change each year.

Question

Quizplus · Accepted Answer

The PCE includes the prices of a wider range of consumer goods and services, making it a more comprehensive measure of inflation than the CPI, which only measures a fixed basket of goods and services. This means that the PCE is able to capture changes in consumer spending patterns over time, which can be important for accurately measuring inflation.

An Advantage of the Personal Consumption Expenditures Price Index (PCE)over