Suppose the market basket of goods and services cost $3,500 in 1996 but today costs $4,250. Using 1996 as the base year, the consumer price index for today is

Question

Quizplus · Accepted Answer

To calculate the consumer price index (CPI), we need to use the following formula:

CPI = (Cost of market basket in current year / Cost of market basket in base year) x 100

Using the information provided, we can plug in the numbers:

CPI = (4,250 / 3,500) x 100
CPI = 121.4

Therefore, the CPI for today (using 1996 as the base year) is 121.4. The correct answer is D.

Suppose the Market Basket of Goods and Services Cost $3,500