Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
B → D → A → C
B
D → A → C → B
C
A → C → B → D
D
B → A → C → D
Understanding the Answer
Let's break down why this is correct
Answer
To analyze the impact of the Consumer Price Index (CPI) on economic policy decisions, you first need to determine the basket of goods and services used for the CPI calculation. This step helps identify what items are included in measuring price changes. Next, you compare the current CPI with the base year CPI to see how prices have changed over time. After that, you analyze the calculated CPI to identify inflation trends, which shows whether prices are rising or falling. Finally, you can use these inflation trends to inform monetary policy adjustments, so that economic decisions can be made based on the current economic situation.
Detailed Explanation
First, we compare the current CPI with the base year CPI to see how prices have changed. Other options are incorrect because This option suggests starting with the basket of goods, but we need to compare the current CPI first; This choice starts with analyzing trends before comparing the CPI, which is backwards.
Key Concepts
Consumer Price Index (CPI)
Inflation and Economic Policy
Monetary Policy
Topic
Understanding Consumer Price Index
Difficulty
hard level question
Cognitive Level
understand
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