Suppose total expenditures for a typical household in 2009 were $3,300 per month and that the cost of purchasing exactly the same items in 2012 was $3,993 per month.If 2009 is the base year,the consumer price index (CPI)for 2012 equals
A) 76.
B) 83.
C) 100.
D) 121.
E) 145.

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 cost of the basket in 2009 is the base year, so we have:
CPI = (3993/3300) x 100
CPI = 1.21 x 100
CPI = 121
Therefore, the answer is D) 121.

Suppose Total Expenditures for a Typical Household in 2009 Were