You know that a chocolate bar costs 60 cents today. You also know the CPI for 1962 and the CPI for today. Which of the following would you use to compute the price of the candy bar in 1962 prices?

Question

Quizplus · Accepted Answer

To compute the price of the candy bar in 1962 prices, we need to adjust the current price of the candy bar to account for the change in inflation over time. The correct formula for this calculation is:
1962 Price = Current Price x (1962 CPI / Current CPI)
So, we need to divide the 1962 CPI by the current CPI. Therefore, the correct answer is D, which multiplies 60 cents by (1962 CPI/today's CPI).

You Know That a Chocolate Bar Costs 60 Cents Today