Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
An increase in consumer demand for goods and services
B
A decrease in the number of goods available in the market
C
A change in government policy regarding price controls
D
A reduction in the overall income of consumers
Understanding the Answer
Let's break down why this is correct
Answer
The Consumer Price Index (CPI) measures how much prices for everyday goods and services change over time. When the CPI increases over a year, it usually means that the overall cost of living has risen. This can happen for several reasons, but one common cause is inflation, which is when there is more money circulating in the economy than there are goods and services available to buy. For example, if many people suddenly have more money to spend, businesses may raise their prices because they can sell their products for more. So, an increase in CPI generally indicates that consumers are paying more for the same items than they did before.
Detailed Explanation
When people want to buy more things, prices usually go up. Other options are incorrect because Some might think fewer goods always means higher prices; It's easy to think that government rules on prices cause changes.
Key Concepts
Consumer Price Index (CPI)
Inflation
Demand and Supply
Topic
Understanding Consumer Price Index
Difficulty
easy level question
Cognitive Level
understand
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