Changes in the CPI only indicate whether prices have increased more or less rapidly in an area since the base period.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) measures the changes in the prices of goods and services over time. It compares current prices to a base period and expresses the change as a percentage. Therefore, changes in the CPI do indicate whether prices have increased more or less rapidly in a specific area since the base period.

Changes in the CPI Only Indicate Whether Prices Have Increased