There are separate CPIs for various components of the market basket. For example, the CPI for new motor vehicles (1982-84 = 100) was 132.4 in 2008.
If there were no adjustments for quality improvements, then how much did new motor vehicle prices increase from the base period to 2008?
A) By 24%
B) By 132.4%
C) By 32.4%
D) None of the answers are correct.
E) Impossible to say because the CPI doesn't measure prices.

Question

Quizplus · Accepted Answer

The CPI for new motor vehicles was 132.4 in 2008, using the base year of 1982-84 = 100. Therefore, new motor vehicle prices increased by 32.4% [(132.4-100)/100 x 100%] from the base period to 2008, assuming no adjustments for quality improvements. Option C is the correct answer.

There Are Separate CPIs for Various Components of the Market