Question

An increase in the Consumer Price Index indicates that Group of answer choices the real income of households is increasing. the purchasing power of the dollar is increasing. the cost of buying the typical bundle of goods consumed by households is increasing. the real net worth of consumers is increasing.

Answer 1

Answer:

the cost of buying the typical bundle of goods consumed by households is increasing.

Explanation:

The consumer price index (CPI) measures the average nominal value of a basket of goods that includes transportation costs, food, housing costs, healthcare, etc.

The CPI is used to measure inflation from one year to another, or from one year to a base year. As the CPI index increases, inflation also increases, reducing the purchasing power of the dollar and the real income of households.