Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2008 the CPI is 450. What does this "450" mean? a. What cost $100 in 1982 will on average cost 450 times as much in 2008. b. What cost $100 in 1982 will on average cost $450 morein 2008. c. What cost $100 in 1982 will on average cost 100/450 (or 0.22) times as much in 2008 (that is, it will cost $22 in 2008). d. What cost $100 in 1982 will on average cost $350 more.

Question

Areli Kelly

Business

26 April, 09:21

Suppose that 1982 is the base year for the Consumer Price Index (CPI) and in 2008 the CPI is 450. What does this "450" mean? a. What cost $100 in 1982 will on average cost 450 times as much in 2008. b. What cost $100 in 1982 will on average cost $450 morein 2008. c. What cost $100 in 1982 will on average cost 100/450 (or 0.22) times as much in 2008 (that is, it will cost $22 in 2008). d. What cost $100 in 1982 will on average cost $350 more.

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Ibrahim Hayes · Answer 1

Option d. What cost $100 in 1982 will on average cost $350 more.

Explanation:

This is because when a base is set the initial value is 100, and at any moment this base can be compared with the current value by subtracting the base and then dividing it by the base again. With this exercise, you will get the number of times that the base has changed in time. In this example, in 2008 the CPI was 450, computing: 450-100=350/100=3.5 In dollar in 1982 is equal than 3.5 in 2008, or the same than option d