Question

John complained to his buddy, Frank, that prices have increased a lot over the past year. Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Frank feels that the average price of consumer goods hasn't changed. Frank and John can refer to the __________ to learn how government economists currently view the price situation.
A. GDP

B. CPI

C. PPI

D. MEW

Answer 1

Answer:

B. CPI

Explanation:

If John and Frank are confused whether that prices have increased a lot over the past year and there is lack of clarity that the average price of consumer goods hasn't changed, then Frank and John can refer to the Consumer Price Index to learn how government economists currently view the price situation.

The Consumer Price Index (CPI) is a measure that calculates the changes in  the weighted average of prices of consumer goods and services, including transportation, food, and medical care.

The Bureau of Economic Analysis and Statistics of a country calculates the CPI by dividing price changes for each item by its original price.