In a particular nation,people buy a completely unique and different set of goods and services every year.None of the goods purchased in the new year are the same as any of the goods purchased in the previous year.Based on this information:
A) we would know the nation is experiencing inflation.
B) we would know the nation is experiencing deflation.
C) the consumer price index (CPI) would be meaningless in this nation.
D) this nation faces a price confusion problem.
E) the relative price of all goods would determine the CPI.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) measures the change in price of a fixed basket of goods and services over time. If the set of goods and services purchased by consumers is completely different every year, then there is no fixed basket to measure changes in price. Therefore, the CPI would be meaningless in this nation.

In a Particular Nation,people Buy a Completely Unique and Different