The CPI is used to determine:
A) how higher quality products increase the wellbeing of consumers.
B) how the cost of living changed from one period to another.
C) the changes in prices of all consumer goods and services.
D) how changing prices affect the export of goods and services.

Question

Quizplus · Accepted Answer

The CPI (Consumer Price Index) is a measure of the change in the cost of living over time. It tracks the prices of a basket of goods and services that are typical of a consumer's spending, and compares the cost of that basket of goods and services over time. The CPI is used to determine how the cost of living has changed from one period to another, making option B the correct choice. Option A is incorrect because the CPI only measures changes in prices, not changes in quality. Option C is partially incorrect, as the CPI only tracks the prices of specific goods and services included in the basket, not all consumer goods and services. Option D is also incorrect as the CPI is not directly related to the export of goods and services.

The CPI Is Used to Determine