The CPI is based on what is happening to the prices of a "basket" of goods and services for an average family.

Question

Quizplus · Accepted Answer

The CPI (Consumer Price Index) is indeed based on the prices of a basket of goods and services that are typically purchased by an average family. This basket includes items such as food, clothing, housing, transportation, and healthcare, among others. By tracking the changes in the prices of these goods over time, the CPI is able to provide a measure of inflation, which is the rate at which prices are rising across the economy. The CPI is one of the most commonly used indicators of inflation and is closely watched by policymakers, economists, and investors.

The CPI Is Based on What Is Happening to the Prices