Economics • Economic BasicsEasy
What does 'Consumer Price Index (CPI)' measure?
A. Changes in the price level of goods and services purchased by producers
B. Changes in the average retail prices of a representative basket of goods and services bought by households✓ Correct Answer
C. Only the wholesale price fluctuations of manufactured goods
D. The total export and import price index of a nation
💡 Solution & Explanation
The Consumer Price Index tracks changes in retail prices paid directly by households for a representative basket of goods and services over time. Measures like the Wholesale Price Index capture price changes at the producer level rather than retail consumption levels.
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