The Consumer Price Index (CPI)measures inflation for every individual.
A) True, the weights used in calculating the CPI are adjusted for every individual in the country.
B) True, people all face the same prices and therefore face the same inflation.
C) False, the CPI uses weights based on how much each product represents in the typical household budget.
D) False, the CPI doesn't measure inflation.

Question

Quizplus · Accepted Answer

The CPI uses weights based on how much each product represents in the typical household budget, not based on individual spending habits or preferences. Therefore, the inflation measured by the CPI is not specific to every individual, but rather represents the average inflation experienced by households in the country.

The Consumer Price Index (CPI)measures Inflation for Every Individual