In price indexing, what does the regimen refer to?

In price indexing, what does the regimen refer to?

• A. The broad basket of goods used to measure inflation.
• B. A random sample of products not used in the index.
• C. The selected goods and services priced for the purpose of compiling a price index.
• D. Total value of all goods in the economy.

Answer: (C)

In price indexing, the regimen is the specific set of goods and services whose prices are tracked to build the index. This is the actual group chosen to be priced each period so that the movements in their prices—and their weights reflecting how much people spend on them—drive the measurement of the overall price level over time. It isn’t just a broad description of a basket, nor a random sample, nor the total value of all goods in the economy. It’s the selected items priced for the purpose of compiling the price index.

In price indexing, the regimen is the specific set of goods and services whose prices are tracked to build the index. This is the actual group chosen to be priced each period so that the movements in their prices—and their weights reflecting how much people spend on them—drive the measurement of the overall price level over time. It isn’t just a broad description of a basket, nor a random sample, nor the total value of all goods in the economy. It’s the selected items priced for the purpose of compiling the price index.