Question

John complained to his buddy, Frank, that prices have increased a lot over the past year. Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Frank feels that the average price of consumer goods hasn't changed. Frank and John can refer to the __________ to learn how government economists currently view the price situation.

Answer 1

Answer: Consumer price index

Step-by-step explanation: A consumer price index is an index showing the change in prices of goods and services in an economy in a particular year. In the consumer price index, the prices in the current year is generally compared with some base year.

In the given case John and Frank can refer to the consumer price index to evaluate whether the general price level and cost of living in the economy has increased or decreased.