You know that a candy bar costs sixty cents today. You also know the CPI for 1962 and the CPI for today. Which of the following would you use to compute the price of the candy bar in 1962 prices?

Question

Quizplus · Accepted Answer

To compute the price of the candy bar in 1962 prices, we need to adjust the current price for inflation using the CPI. The CPI in 1962 is the base year, so we want to adjust the current price to reflect what it would cost in 1962. This means we need to divide by the current CPI and multiply by the 1962 CPI. Therefore, choice D, sixty cents × 1962 CPI / today's CPI), is the correct option.

You Know That a Candy Bar Costs Sixty Cents Today