Suppose total expenditures for a typical household in 2002 were $2,500 per month,while the cost of purchasing exactly the same items in 2012 was $3,000.If 2002 is the base year,the consumer price index (CPI)for the year 2012 equals
A) 83.
B) 100.
C) 120.
D) 125.
E) 130.

Question

Quizplus · Accepted Answer

The CPI is calculated as (Cost in Current Year / Cost in Base Year) x 100. So, (3000 / 2500) x 100 = 120.

Suppose Total Expenditures for a Typical Household in 2002 Were