The consumer price index is used to
A)convert nominal GDP into real GDP.
B)turn dollar figures into meaningful measures of purchasing power.
C)characterize the types of goods and services that consumers purchase.
D)measure the quantity of goods and services that the economy produces.

Question

Quizplus · Accepted Answer

The consumer price index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is used to turn dollar figures into meaningful measures of purchasing power, by adjusting for inflation and changes in the cost of living. Thus, the best choice is B.

The Consumer Price Index Is Used to