Economics 0455 · IGCSE · Inflation and deflation

Inflation and deflation — practice question

Some goods account for a larger proportion of a typical household’s total spending than others. How is this taken into account when a consumer prices index is constructed?

  • Aby deducting the goods
  • Bby giving a weight to the goods
  • Cby taking an average of price fluctuations during a year
  • Dby using the price elasticity of demand for the goods

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