Which of the following measures of inflation is based on a basket of goods and services for a typical household?
A) the index of household expenditures
B) the producer price index
C) the GDP deflator
D) the consumer price index

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is based on a basket of goods and services typically consumed by households, making it the best choice for the given question. The other measures of inflation listed are not specifically focused on household consumption. The index of household expenditures is not a commonly used measure of inflation, while the producer price index (PPI) measures changes in prices received by producers, and the GDP deflator measures changes in the prices of all goods and services included in GDP.

Which of the Following Measures of Inflation Is Based on a Basket