Asked by Yamile Espinosa on Jun 16, 2024
Verified
If the CPI is 125,the prices have _____ since the base year.
A) fallen by 125 percent
B) fallen by 75 percent
C) risen by 25 percent
D) risen by 75 percent
E) risen 125 percent
CPI
The Consumer Price Index is a metric that calculates the average cost of a selection of consumer items and services, including food, transportation, and healthcare, by looking at their weighted average prices.
- Interpret the adjustments in the Consumer Price Index (CPI) and their influence on the health of the economy.
Verified Answer
AF
Ashlee FortenberryJun 16, 2024
Final Answer :
C
Explanation :
The CPI of 125 means that prices have increased by 25% since the base year. The base year is typically assigned a CPI of 100, so any number higher than 100 represents an increase in prices, and any number lower than 100 represents a decrease in prices. Choices A, B, D, and E are all incorrect because they suggest that prices have decreased (A and B) or increased by a greater amount than 25% (D and E), which is not the case.
Learning Objectives
- Interpret the adjustments in the Consumer Price Index (CPI) and their influence on the health of the economy.