Suppose the typical household spends $3,500 on goods and services during the month of January,and $4,300 on the same goods and services in February.Using January as the base period,what is the consumer price index for February?

Question

Quizplus · Accepted Answer

The formula for calculating CPI is:
(Cost of basket in current period / Cost of basket in base period) x 100
Using January as the base period, the cost of basket in January is $3,500 and the cost of basket in February is $4,300. Therefore:
CPI = (4,300 / 3,500) x 100 = 122.9
Hence, the correct answer is (D) 122.9.

Suppose the Typical Household Spends $3,500 on Goods and Services