Question

The consumer price index (CPI) is:

A) a measure of food prices, because food is what is consumed.
B) a measure of all prices in the economy.
C) the measure of consumer prices in both rural and urban areas; it is calculated by adding up all prices.
D) a measure of the price level based on the consumption patterns of a typical consumer.
E) a measure of food, clothing, and housing prices.

Answer 1

The Consumer Price Index (CPI) is a measure of inflation that U.S. government statisticians calculate based on the price level from a fixed basket of goods and services that represents the average consumer's purchases. It is used to track changes in the cost of living over time and helps government, businesses, and individuals make economic decisions and form monetary and fiscal policies.

Step-by-step explanation:

The Consumer Price Index (CPI) is a measure of inflation that U.S. government statisticians calculate based on the price level from a fixed basket of goods and services that represents the average consumer's purchases. It is a measure of all prices in the economy and is used to track changes in the cost of living over time. The CPI is important because it helps government, businesses, and individuals make economic decisions and form monetary and fiscal policies.