A consumer price index of 325 means that prices are ________ percent higher than those in the base year.
A) 325
B) 225
C) 125
D) 25
E) 3.25

Question

Quizplus · Accepted Answer

A consumer price index (CPI) of 325 means that prices are 225% higher than those in the base year. The CPI measures changes in the price level of a weighted average market basket of consumer goods and services purchased by households. A CPI of 100 represents the price level in the base year; thus, a CPI of 325 indicates that prices have increased by 225% from the base year (325 - 100 = 225).

A Consumer Price Index of 325 Means That Prices Are