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Soloha48 [4]
3 years ago
14

Which of the following statements is (are) correct?

Business
1 answer:
Eddi Din [679]3 years ago
8 0

Answer:

C) (x) and (z) only

Explanation:

X: A major problem with the CPI is that it too static and the basket of goods repeats year after year, but people tend to not buy the same things year after year. When the economy is not doing well, people search for cheaper alternatives, when the economy is doing great, people tend to buy higher quality products. The CPI cannot be adjusted every single year, or else it couldn't be used to compare price changes year after year, and that is exactly its greatest weakness.

Z: The basket of goods should be weighted depending on consumer preferences. For example, if people buy more chicken that beef, then chicken should have a relatively higher weight in the CPI basket.

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