If the price of clothing (which accounts for 5% of total expenditures in the CPI basket), rises by 10% in one year while the prices of all other goods remain constant, by how much will the CPI rise?

Question

Quizplus · Accepted Answer

The CPI will rise by 0.5% because clothing accounts for 5% of the CPI basket, and a 10% increase in clothing prices results in a 0.5% increase in the overall CPI (0.05 * 10% = 0.5%).

If the Price of Clothing (Which Accounts for 5% of Total