John Is Creating a Presentation on the Consumer Price Index

Multiple Choice

John is creating a presentation on the consumer price index for his business class.He wants students to understand that food and energy prices have risen more rapidly than other market items that the government traditionally measures for inclusion in the CPI calculation.He will show students that the core inflation figure will be _______ than the CPI.He will then inform the class that if consumers begin substituting,for example: If the prices at full service hair styling salons get too exorbitant,consumers may substitute by going to cheaper hair cutting salons.This will make the ___________ calculation lower.

A) higher;C-CPI
B) lower;C-CPI
C) lower,PPI
D) higher,PPI