If the inflation rate, as measured by the CPI, over the past year was 4%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.
A) $20,000, $21,000
B) $10,000, $10,400
C) $20,000, $20,400
D) $10,000, $10,800

Question

Quizplus · Accepted Answer

The correct answer is B) $10,000, $10,400 because a 4% increase on $10,000 results in an additional $400, making the new total $10,400.

If the Inflation Rate, as Measured by the CPI, Over