If the CPI was 125 this year and 120 last year,then
A)the cost of the CPI basket of goods and services increased by 4.2 percent this year.
B)the price level increased by 4.2 percent this year.
C)the inflation rate for this year was 4.2 percent.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The CPI increased from 120 to 125, which is a 4.2% increase. This means the cost of the CPI basket, the price level, and the inflation rate all increased by 4.2%.

If the CPI Was 125 This Year and 120 Last