The cost of the CPI basket in base-period prices is $200 and the cost of the CPI basket in current-period prices is $450. The CPI in the current year is
A)450.
B)225.
C)300.
D)250.
E)44.44.

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) is calculated by dividing the cost of the CPI basket in current-period prices by the cost of the CPI basket in base-period prices and then multiplying by 100. So, CPI = ($450 / $200) * 100 = 225.

The Cost of the CPI Basket in Base-Period Prices Is