The formula for calculating the CPI is
A)(expenditures in the current year/expenditures in the base year)× 100.
B)(expenditures in the current year × expenditures in the base year)/100.
C)(expenditures in the base year/expenditures in the current year).
D)(expenditures in the base year × 100)/(expenditures in the current year).
E)(expenditures in the current year)/(average of base year and current year expenditure)× 100.

Question

Quizplus · Accepted Answer

The formula for calculating CPI (Consumer Price Index) is (expenditures in the current year/expenditures in the base year)× 100. This formula calculates the percentage increase in the price of goods and services over time, by comparing the current year's prices to a base year's prices. The resulting CPI number is used as an indicator of inflation, which affects the economy and monetary policy. Therefore, choice A is the correct formula for calculating CPI.

The Formula for Calculating the CPI Is