A 100% increase in the price of salt changes the CPI more than a 10% increase in rent.

Question

Quizplus · Accepted Answer

The CPI (Consumer Price Index) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Rent typically has a much larger weight in the CPI basket than salt because people spend a much larger portion of their income on housing than on salt. Therefore, a smaller percentage increase in rent can have a larger impact on the overall CPI than a larger percentage increase in the price of salt.

A 100% Increase in the Price of Salt Changes the CPI