The CPI for "personal computers and peripheral equipment" in June 2006 was 10.7 (1982-1984 = 100). Interpret this index.
A) There was no significant increase in the price of "personal computers and peripheral equipment"
B) The price of "personal computers and peripheral equipment" increased 10.7%.
C) The price of "personal computers and peripheral equipment" decreased 89.3%.
D) If the average price of a computer in 1982-1984 was $3000.00, the CPI for "personal computers and peripheral equipment" would predict that the price of a computer in June 2006 would be $893.

Question

Quizplus · Accepted Answer

The CPI of 10.7 indicates that the price level of "personal computers and peripheral equipment" in June 2006 was only 10.7% of the price level in the base period (1982-1984), meaning prices decreased by 89.3%.

The CPI for "Personal Computers and Peripheral Equipment" in June