Question

The CPI (consumer price index) measures ________________ and ________________.

Answer 1

Answer:

C

Explanation:

inflation and deflation; includes energy and food as part of the market basket of goods and services that it measures

The Consumer Price Index (CPI) is a measure that examines the  averageof prices of a basket of consumer goods and services, such as gas prices, educational expenses transportation, food, medical care and most of the products used for daily living. It is then calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to understand price changes associated with the cost of living; the CPI is used frequently as a statistics for identifying periods of inflation or deflation.

Answer 2

Answer:

C) inflation and deflation; includes energy and food as part of the market basket of goods and services that it measures

Explanation:

The consumer price index (CPI) measures the average prices of a basket of goods and services during one year, and then compares them to the previous price of that same basket of goods. A lot of different things are included in the CPI basket, for example: cereal, milk, coffee, housing costs, bedroom furniture, apparel, transportation expenses (including gas prices), medical care costs, educational expenses, recreational expenses, toys, etc.

Theoretically the CPI basket should include most of the products that an average person purchases during the year, but that is really difficult to determine exactly.