The technique currently used to calculate the CPI implicitly assumes that over time consumers buy
A)relatively more of goods whose relative prices are rising.
B)goods and services whose quality improves at the rate of growth of real income.
C)the same relative quantities of goods as in a base year.
D)relatively less of goods whose relative prices are rising.

Question

Quizplus · Accepted Answer

The CPI calculation assumes a fixed basket of goods and services, meaning it uses the same relative quantities of goods as in a base year, without accounting for changes in consumer behavior over time.

The Technique Currently Used to Calculate the CPI Implicitly Assumes