CPI (consumer price index) and PCE (personal consumption expenditures) are used to gauge inflation. However, they differ in several ways, to include data sources and frequency. In addition, A) PCE is more comprehensive and includes all goods and services consumed in the U.S. whether they are purchased by consumers, or by employers or federal programs on behalf of consumers B) CPI uses fixed weights generated from a basket of goods that is updated every two years C) CPI is a portion of PCE and is used to adjust tax brackets and certain benefits D) A and B E) All of the above
CPI (consumer price index) and PCE (personal consumption expenditures) are used to gauge inflation. However, they differ in several ways, to include data sources and frequency. In addition, A) PCE is more comprehensive and includes all goods and services consumed in the U.S. whether they are purchased by consumers, or by employers or federal programs on behalf of consumers B) CPI uses fixed weights generated from a basket of goods that is updated every two years C) CPI is a portion of PCE and is used to adjust tax brackets and certain benefits D) A and B E) All of the above
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![CPI (consumer price index) and PCE (personal consumption expenditures) are used to gauge inflation. However, they differ in several ways, to
include data sources and frequency. In addition,
OA) PCE is more comprehensive and includes all goods and services consumed in the U.S. whether they are purchased by consumers, or by
employers or federal programs on behalf of consumers
B) CPI uses fixed weights generated from a basket of goods that is updated every two years
C) CPI is a portion of PCE and is used to adjust tax brackets and certain benefits
D) A and B
E) All of the above
Treasury Inflation Protection Securities (TIPS) are U.S. Treasury indexed securities where
A) the interest and principal payments are adjusted for changes in the price level.
B) the interest rate provides a direct measure of the real interest rate.
C) expected inflation is implied.
D) economic growth or decline is indicated.
E) All of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc1ffe094-d1d0-4392-9791-388a04b52b18%2F07ccb482-5044-46bb-b38f-560120d07a27%2Frgineha_processed.png&w=3840&q=75)
Transcribed Image Text:CPI (consumer price index) and PCE (personal consumption expenditures) are used to gauge inflation. However, they differ in several ways, to
include data sources and frequency. In addition,
OA) PCE is more comprehensive and includes all goods and services consumed in the U.S. whether they are purchased by consumers, or by
employers or federal programs on behalf of consumers
B) CPI uses fixed weights generated from a basket of goods that is updated every two years
C) CPI is a portion of PCE and is used to adjust tax brackets and certain benefits
D) A and B
E) All of the above
Treasury Inflation Protection Securities (TIPS) are U.S. Treasury indexed securities where
A) the interest and principal payments are adjusted for changes in the price level.
B) the interest rate provides a direct measure of the real interest rate.
C) expected inflation is implied.
D) economic growth or decline is indicated.
E) All of the above
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