For the purpose of calculating the consumer price index,the basket of goods
A)is kept the same from year to year so that the effects of price changes are isolated from the effect of any quantity changes that might be occurring at the same time.
B)is kept the same from year to year;otherwise,the value of the index would remain constant from year to year.
C)varies from year to year;otherwise,the value of the index would remain constant from year to year.
D)varies from year to year so that consumers' buying patterns are updated in a timely fashion.

Question

Quizplus · Accepted Answer

The purpose of keeping the basket of goods the same from year to year is to isolate the effects of price changes from any quantity changes that might be happening at the same time. This allows for an accurate calculation of the change in the cost of living over time. If the basket of goods were to vary from year to year, it would be difficult to determine whether any changes in the consumer price index were due to changes in prices or changes in the types and quantities of goods and services being consumed.

For the Purpose of Calculating the Consumer Price Index,the Basket