The basket of goods cost $160 in the year 2005 and $424 in the year 2006. What is the CPI in 2006 when the base year is 2005?

Question

Quizplus · Accepted Answer

To calculate the CPI, we use the formula: 
CPI = (Cost of basket in current year / Cost of basket in base year) x 100

In this case, the base year is 2005 and the current year is 2006.

CPI = (424 / 160) x 100
CPI = 265

Therefore, the CPI in 2006 when the base year is 2005 is 265.

The Basket of Goods Cost $160 in the Year 2005