If the basket of goods and services used to calculate the CPI cost $200 in the reference base period and $450 in a later year, the CPI for the latter year equals
A) 325.
B) 450.
C) 200.
D) 225.

Question

Quizplus · Accepted Answer

The CPI is calculated as the (cost of basket in specific year / cost of basket in reference year) x 100. Therefore, the CPI for the later year would equal (450 / 200) x 100 = 225. Therefore, the answer is choice D.

If the Basket of Goods and Services Used to Calculate