The "basket" on which the CPI is based is composed of

Question

a. raw materials purchased by firms.
b. total current production.
c. products purchased by the typical consumer.
d. consumer production.
e. none of the above.

Answer 1

The correct answer is: c. products purchased by the typical consumer.

The Consumer Price Index (CPI) is based on a "basket" of goods and services that reflects the purchasing habits of the typical consumer.