Which of the Following Is True About the Consumer Price

Multiple Choice

Which of the following is true about the consumer price index (CPI) and the GDP price index?

A) Both measures weigh prices by quantities consumed in some base year.
B) Both yield identical numbers for price level changes for any two years.
C) Both CPI and the GDP price index underestimate changes in the price level in an economy.
D) The CPI measures changes in relative prices of goods, while the GDP price index measures changes in the absolute price level of a fixed basket of goods and services.
E) CPI includes products that are widely used, while the GDP price index includes all goods and services.