Question

Consumer price index (CPI) is an ?

Answer 1

The correct answer is C.

The Consumer Price Index (CPI) measures the changes in the price paid by consumers for a predefined basket of goods and services which are typically bought by households.

Comparting the figures registered over time, enables to determine whether such price level has increased or declined. Therefore, it can be concluded whether the amount of products that can be purchased with the same amount of a currency is greater, equal or smaller. In the first case, the purchasing power of than currency has increased, in the second case it has remained stable, and in the last case it has decreased.

Answer 2

a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer good and services. Glad to know this by memory. Knew it would come in handy.