The Consumer Price Index (CPI) measures the prices paid
The Consumer Price Index (CPI) measures the prices paid
- A) for farm tractors
- B) for goods and services purchased by a typical household
- C) for goods and services bought by companies
- D) none of the above
Correct Answer: B) for goods and services purchased by a typical household
Explanation
The Consumer Price Index (CPI) is a measure of how much it costs to buy goods and services. It helps us understand how much more or less expensive things are over time. The question is asking what the CPI measures specifically.
Option A suggests that the CPI measures the prices paid for farm tractors. This is not correct because the CPI measures the prices of goods and services that are purchased by households, not just farm tractors.
Option B is the correct answer. The CPI measures the prices of goods and services that are typically purchased by a household. This includes things like food, clothing, housing, and transportation. By tracking the prices of these items over time, we can see how the cost of living changes from year to year.
Option C suggests that the CPI measures the prices of goods and services bought by companies. This is not correct because the CPI focuses on household purchases, not business purchases.
Option D suggests that none of the above options are correct. This is not correct because Option B is the correct answer.
In summary, the Consumer Price Index (CPI) measures the prices of goods and services that are typically purchased by a household, which includes items like food, clothing, housing, and transportation.