A country reports the total expenditures on the fixed CPI basket for the past three years.The cost of the CPI basket in 2010 was $23,000,the cost of the CPI basket for the reference base period,2011,was $23,805,and the cost of the CPI basket in 2012 was $24,500.The CPI for 2012 is

Question

Quizplus · Accepted Answer

Step 1: Calculate the CPI for each year using the formula:

CPI = (Cost of CPI basket in specific year / Cost of CPI basket in base year) x 100

- CPI for 2010 = (23,000 / 23,805) x 100 = 96.04
- CPI for 2011 (base year) = 100
- CPI for 2012 = (24,500 / 23,805) x 100 = 102.92

Step 2: The CPI for 2012 is the highest, so it is the answer.

Therefore, the best choice is C) 102.9.

A Country Reports the Total Expenditures on the Fixed CPI