For any given year, the CPI is the price of the basket of goods and services in the
A)given year divided by the price of the basket in the base year, then multiplied by 100.
B)given year divided by the price of the basket in the previous year, then multiplied by 100.
C)base year divided by the price of the basket in the given year, then multiplied by 100.
D)previous year divided by the price of the basket in the given year, then multiplied by 100.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) is calculated by taking the price of the basket of goods and services in the given year, dividing it by the price of the same basket in the base year, and then multiplying the result by 100. This method allows for the measurement of inflation or deflation between the base year and the given year.

For Any Given Year, the CPI Is the Price of the Basket