Question

Suppose the typical household spends $3,500 on goods and services during the month of January, and $4,300 on the same goods and services in February. Using January as the base period, what is the consumer price index for February?

Answer 1

The consumer price index for February is 122.85

Step-by-step explanation:

Consumer price index: It shows a change in prices for different years in different products and service.

In this question, we use the formula of Consumer price index which is shown below

= Good and services spend on February month ÷ Good and services spends on January month × 100

= $4,300 ÷ $3,500 × 100

= 1.2285 × 100

=122.85

In the question, it is given that take the January month as the base year so we do the same.

Hence, the consumer price index for February is 122.85