Asked by
Aylin Silva
on Oct 13, 2024
Verified
A current value for the CPI of 125 means that the
A) consumer must now pay $1.25 to purchase goods that cost $1.00,on the average,in the base year.
B) average price level currently is 125 times higher than the average price level during the base year.
C) purchasing power of a given money income is 25 percent larger during the base year than when the index was formulated.
D) purchasing power of money has increased 125 percent over time.
CPI
Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to assess inflation.
Base Year
A reference year against which economic growth or inflation is measured, often using indices in real GDP calculations or price levels.
- Acquire knowledge about the principle and consequences of inflation and disinflation.
Verified Answer
SS
Learning Objectives
- Acquire knowledge about the principle and consequences of inflation and disinflation.