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The CPI is computed by finding the price of a market basket of goods whose contents vary each year. a. True b. False of Selec
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Answer #1

The given statement is true and this is because CPI is actually calculated by fixing a basket of goods and observing the price changes of the basket of goods every year so that the changes in the price level can be calculated and the the changes in inflation can be observed on the whole for instance consider there is a base year and the current year where the CPI can be calculated as

SUM OF (Pcurrent *Qbasket)/SUM OF (Pbasket*Qbasket)

Therefore (a) True is the answer to this question

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