Question

(50 pts) Which of the following statements concerning price indexes is not accurate?

Price indexes produce an average of prices that economists can compare to earlier averages.
Price indexes define the cost of goods in the entire economy at a given point in time.
Price indexes assist consumers and businesses in making economic decisions.
Price indexes assist the government in making policy decisions.

Answer 1

Price indexes define the cost of goods in the entire economy at a given point in time.

Step-by-step explanation:

Price indexes actually measure relative price changes, consisting of a series of numbers arranged so that a comparison between the two values for any two periods or places will show the average change in prices between periods or the average difference in prices between places.

Answer 2

Price indexes define the cost of goods in the entire economy at a given point in time.

A price index is a scale used to measure changes in the levels of prices. This is a percentage scale that can be either based on prices of a single good or an entire market basket. This is only a small-scale index, not representative of an entire economy.