The consumer price index is
A)not very useful as a measure of the cost of living.
B)a perfect measure of the cost of living.
C)a useful measure,but not a perfect measure,of the cost of living.
D)not used as a measure of the cost of living.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is a useful measure of the cost of living because it tracks changes in the prices of a representative basket of goods and services consumed by households. However, it is not a perfect measure because it may not reflect the individual experiences of all consumers, may not capture changes in quality, and may not take into account substitution effects. Therefore, choice C is the best option, "a useful measure but not a perfect measure of the cost of living."

The Consumer Price Index Is