Suppose that last year, the price of strawberries was $2 and the price of milk was $1. This year, the price of milk is $2 and the price of strawberries is $1. Which of the following statements is true?
A) The CPI might increase or decrease depending on the quantities in the CPI market basket.
B) The CPI decreases because strawberries are cheaper.
C) The change in the CPI depends how the market basket changed between the two years.
D) The CPI does not change because the change in the two prices is the same.
E) The CPI increases because milk is more expensive.
Correct Answer:
Verified
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