Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year.In 2012,the basket's cost was $50;in 2014,the basket's cost was $52;and in 2016,the basket's cost was $58.The value of the CPI in 2016 was
A)106.0.
B)104.0.
C)111.5.
D)116.0.

Question

Quizplus · Accepted Answer

To calculate the CPI, we need to divide the cost of the basket of goods and services in the given year by the cost of the basket in the base year and then multiply by 100.

So, using the given values:

CPI in 2012 = (50/52) x 100 = 96.15
CPI in 2014 (base year) = 100
CPI in 2016 = (58/52) x 100 = 111.54

Therefore, the value of the CPI in 2016 was 111.5.

Suppose a Basket of Goods and Services Has Been Selected