The consumer price index (CPI) is designed to measure
A) the impact of price changes on the value of real GDP.
B) the nominal value of consumer spending on food, clothing, and energy.
C) the total spending of households as a percentage of GDP.
D) the impact of price changes on the cost of the typical bundle of goods purchased by households.

Question

Quizplus · Accepted Answer

The CPI is designed to measure the impact of price changes on the cost of the typical bundle of goods purchased by households. It tracks changes in the prices of a representative basket of goods and services over time, such as food, housing, transportation, and medical care, and is used as an indicator of inflation.

The Consumer Price Index (CPI) Is Designed to Measure