If the cost of food & beverages increases by 20 percent,then,other things the same,the CPI is likely to increase by about

Question

Quizplus · Accepted Answer

The cost of food and beverages is just one component of the Consumer Price Index (CPI). A 20% increase in food and beverages would not lead to a 20% increase in the overall CPI because it is only one part of a larger basket of goods and services that make up the index. Based on historical data and economic theory, a 20% increase in food and beverage prices would likely lead to a roughly 3% increase in the CPI.

If the Cost of Food & Beverages Increases by 20