If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals
A) 200.
B) 225.
C) 325.
D) 450.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) for the latter year is calculated by dividing the cost of the basket in the latter year by the cost in the base year and then multiplying by 100. So, $ \frac{450}{200} \times 100 = 225 $.

If the Basket of Goods and Services Used to Calculate