The measure of the average change in prices over time in a fixed "market basket" of goods and services is known as:
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 specifically known as the Consumer Price Index (CPI). A cost of living allowance (A) or adjustment (B) refers to an increase in wages or benefits to keep up with inflation as measured by the CPI. The term "inflation index" (D) could refer to various indices that measure inflation, but it is not as specific as the CPI. Therefore, the best choice would be C - the consumer price index.

The Measure of the Average Change in Prices Over Time