The Consumer Price Index measures inflation by using
A)all goods and services that are produced using a base- year basket.
B)only consumption goods and services purchased using a current- year basket.
C)all goods and services produced in the base year and all goods and services produced in the current year.
D)all goods and services that are produced using a current- year basket.
E)only consumption goods and services purchased using a base- year basket.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) measures inflation by tracking the price changes of a basket of goods and services that households purchase for consumption, using a base year as the benchmark. This means it focuses on consumption goods and services, and the basket is defined based on the base year, not the current year.

The Consumer Price Index Measures Inflation by Using