What is the measure of the average change in prices over time in a fixed "market basket" of goods and services?
A) a cost of living allowance
B) a cost of living adjustment
C) the consumer price index
D) the inflation index

Question

Quizplus · Accepted Answer

The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as the Consumer Price Index (CPI). The CPI is used to track inflation and is often used to adjust salaries, wages, and government benefits. A cost of living allowance (A) or adjustment (B) may be based on the CPI, but they specifically refer to changes to salaries or benefits that are intended to keep up with changes in the cost of living. The inflation index (D) is a more general term that can refer to any index that tracks changes in inflation, not just the CPI specifically.

What Is the Measure of the Average Change in Prices