i. The CPI serves only one major function: as an economic indicator of the rate of inflation.
ii. To construct a special-purpose index designed to measure general business activity, the weights are based on the judgments of the statistician and assigned to each series.
Iii) The Consumer Price Index measures the change in prices of a fixed market basket of goods and services from one period to another.
A) (i), (ii) and (iii) are all correct statements
B) (i) and (ii) are correct statements, but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) All statements are false

Question

i. The CPI serves only one major function: as an economic indicator of the rate of inflation. 
ii. To construct a special-purpose index designed to measure general business activity, the weights are based on the judgments of the statistician and assigned to each series.
Iii) The Consumer Price Index measures the change in prices of a fixed market basket of goods and services from one period to another.
A) (i), (ii) and (iii) are all correct statements
B) (i) and (ii) are correct statements, but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) All statements are false

Quizplus · Accepted Answer

The CPI measures inflation and changes in the cost of living, not just inflation. Special-purpose indices can use subjective weights, and the CPI measures price changes of a fixed basket.

I the CPI Serves Only One Major Function: as an Economic