The Consumer Price Index -CPI- is an important economic and social indicator. It provides with an overall image about the evolution of prices of goods and services consumed by households.
1. If CPI = 125 fixed market basket of goods has…
- …increased 125%
- …decreased 25%
- …increased by 25%
- …remained the same
2. Problems to measure CPI
- introduction of new goods
- substitution bias
- unmeasured quality change
- all of the above
3. CPI is a statistical number showing…
- price averages
- price level of different goods
- retail prices of all goods
- how the economy is behaving
How many answers did you get right this time?
