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For the CPI to Provide an Accurate Measure of the Prices

Question 18

Multiple Choice

For the CPI to provide an accurate measure of the prices paid by urban consumers,it is necessary to


A) assign equal weights to all the goods and services included in the market basket surveyed so that nothing is over-weighted.
B) have a market basket that is consistent and corresponds to what households actually purchase.
C) have prices stated in dollars so consumers can compare what they spend.
D) change the market basket each month to reflect the changes that consumers make.
E) make certain that the incomes of the consumers surveyed do not change because such a change would affect the market basket of the goods and services they buy.

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