Asked by Susana Contreras on May 28, 2024
Verified
If the market basket of goods and services that the Commerce Department uses to calculate the CPI were to decline from $30,000 in the base year to $15,000 in the current year,the current year's CPI would be
A) 300.
B) 150.
C) 100.
D) 50.
E) 0.
Market Basket
A market basket is a collection of goods and services used to track price changes and inflation within an economy.
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.
Commerce Department
A department within a government responsible for regulating, promoting, and facilitating trade and commerce activities.
- Investigate changes in the Consumer Price Index (CPI) and their ramifications for economic prosperity.
Verified Answer
KV
Kevin VelazquezMay 31, 2024
Final Answer :
D
Explanation :
The Consumer Price Index (CPI) is calculated by taking the current year's cost of the market basket and dividing it by the base year's cost, then multiplying by 100. If the current year's cost is $15,000 and the base year's cost is $30,000, the calculation would be ($15,000 / $30,000) * 100 = 50.
Learning Objectives
- Investigate changes in the Consumer Price Index (CPI) and their ramifications for economic prosperity.