Question

Suppose the market basket cost $800 during the base period and $1,800 today. What is the CPI today?

Answer 1

Answer:

225

Explanation:

CPI stands for the consumer price index. It is a measure of inflation in a country per period.

the CPI is calculated using the formula

CPI1    =              Cost of the basket in year1   x 100

                          Cost of basket base year

For this case, CPI =1800 x 100

   800

=2.25 x 100

=225