If the value of the consumer price index (CPI) in 2013 was 135 and the value of the CPI in 2012 was 117,we could correctly say that:
A) the typical basket of goods was about 18% more expensive in 2013 than in 2012.
B) the typical basket of goods was about 18% less expensive in 2013 than in 2012.
C) the typical basket of goods was about 15.4% more expensive in 2013 than in 2012.
D) the average price of all items included in gross domestic product (GDP) was about 18% more expensive in 2013 than in 2012.
E) the average price of all items included in GDP was about 15.4% more expensive in 2013 than in 2012.

Question

Quizplus · Accepted Answer

The formula for calculating the percentage change in CPI is ((new CPI - old CPI) / old CPI) x 100. Plugging in the values given, we get ((135 - 117) / 117) x 100 = 15.4%. Therefore, we can correctly say that the typical basket of goods was about 15.4% more expensive in 2013 than in 2012. Choices A and B are incorrect as they use an incorrect percentage change. Choices D and E are incorrect as they refer to the average price of all items included in GDP, which is not the same as the CPI.

If the Value of the Consumer Price Index (CPI) in 2013