Suppose that 1983 is the base year for the Consumer Price Index (CPI)and in 2019 the CPI is 260.What does this "260" mean?
A) What cost $100 in 1983 on average cost 2.60 times as much in 2019.
B) What cost $100 in 1983 on average cost $260 more in 2019.
C) What cost $100 in 1983 on average cost 0.26 times as much in 2019.
D) What cost $100 in 1983 on average cost $26 more in 2019.

Question

Quizplus · Accepted Answer

The CPI tracks the changes in the prices of goods and services over time. A CPI of 260 means that, on average, the cost of goods and services in 2019 was 2.60 times higher than it was in the base year of 1983. Therefore, choice A is correct. Choices B, C, and D are not accurate interpretations of the CPI value.

Suppose That 1983 Is the Base Year for the Consumer