A chain-weighted price index is different from the consumer price index because:
A) the market basket is not fixed but reflects the current mix of items purchased.
B) the new product bias is reduced.
C) a wider range of products is included beyond only consumer purchases.
D) chain-weighted indices follow the actual purchases of a select group of consumers over time.

Question

Quizplus · Accepted Answer

Chain-weighted price indices adjust the market basket to reflect the current mix of items purchased, unlike the fixed basket used in the consumer price index.

A Chain-Weighted Price Index Is Different from the Consumer Price