If the Consumer Price Index increased from 1.52 to 1.65, then it must be the case that ______ relative to prices in the base year.
A) all prices rose
B) the weighted average level of prices rose
C) all prices fell
D) some prices rose and some prices fell

Question

Quizplus · Accepted Answer

The Consumer Price Index is a measure of the weighted average level of prices of goods and services purchased by consumers. So, if the CPI increases, it means the weighted average level of prices has increased. This could be due to some prices rising and some prices falling, but the overall effect is an increase in the weighted average level of prices. Therefore, option B - the weighted average level of prices rose - is the best choice.

If the Consumer Price Index Increased from 1