Answer:
The price of the market basket of goods and services is now $1,100
Step-by-step explanation:
Consumer Price Index(CPI ): This is the weighted average price of a basket of goods and services consumed by a typical consumer. It is used to measure the rate of inflation.
The increase in the CPI is taken to be the rate of inflation. For example, if the CPI rose to 110 from 100, this implies an inflation rate of 10% within the time period in focus.
Cost of goods now =
(CPI in current year/CPI in base year )× cost of goods in the base year.
cost of goods now = (110/100) × 1000
= $1,100
Kindly note that the the CPI in the base year is taken to be 100
The price of the market basket of goods and services is now $1,100